Kian Ming: Buying the highways removes temptation to extend concessions

The government's move to buy four highways will remove the temptation to extend concession agreements, says a deputy minister.

International Trade and Industry Deputy Minister Ong Kian Ming (photo, above) said these extensions were often negotiated by the previous government in lieu of compensations for scheduled toll hikes.

"They (the previous government) did not want to pay the toll concessionaires for not allowing toll increase, and in exchange, they extended the concession for 10 to 15 years," he said.

Instead of negotiating for deferred compensations, Ong pointed out that the proposed acquisitions would be funded from the proceeds of toll collections and will have no cost implication to the present government.

"This is one example of how we are implementing our manifesto's promises," he said at the Institute for Democracy and Economic Affairs (Ideas) Projek Pantau's second report launch in Kuala Lumpur today.

The event was held to present the results of Ideas ongoing initiative to monitor promises made in Pakatan Harapan's GE14 election manifesto.

The four highways involved are the Lebuhraya Damansara-Puchong (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Lebuhraya Shah Alam (Kesas) and Smart Tunnel (Smart).

Under the current concession agreements, Ong said motorists will have to pay a higher toll rate unless the government proceeded with the proposed acquisitions.

"The toll rates for LDP will increase from RM2.10 to RM3.10 under the current concession agreement.

"For Sprint the increase will be from RM2 to RM2.50; for the Damansara toll; RM2.50 for the Kerinchi Link to RM3.50; for Penchala Link, the toll rate will be increased from RM3 to RM5," he said.

"Instead of allowing this (increase) to happen, the government is taking this money (from toll collections) to acquire the tolls instead," he added.

Finance Minister Lim Guan Eng recently announced that the government had made an RM6.2 billion bid to take over the four toll highways, which could save taxpayers RM5.3 billion in compensation to the concessionaires.

Gamuda Bhd has since announced that it has accepted the proposed offer by the Minister of Finance (Incorporated) to purchase all of the group’s equity stakes in the four companies.