The Malaysian government’s proposed RM6.2 billion takeover of four highway concessionaires has been paused for a re-examination of the offered price, according to government sources. Singapore’s Straits Times (ST), via the Malay Mail, reported that some in the federal government, including cabinet members, believed the offer was excessive.
Some argued that the finance ministry’s projected revenue, backed by congestion charge collection, may not allow for the acquisition to be self-funded as presented currently. “The whole matter (Gamuda proposal) is on hold pending a full review,” the ST quoted an unnamed minister as saying. The Singaporean daily added that the issue was causing friction within the Pakatan Harapan coalition government.
The same minister said finance minister Lim Guan Eng had presented the plan to the public and made offers for the concessionaires – which are linked to Gamuda Bhd – without the agreement of the cabinet. Gamuda, which is agreeable to the buyout offers, is leading the ambitious RM46 billion Penang Transport Masterplan. Lim was the chief minister of Penang before last year’s general election.
This link was fuelling detractors’ suspicions that the two issues were connected, the ST report said. The report also quotes an unnamed DAP leader who somewhat confirms the internal resistance to the takeover proposal. “The finance ministry is of the view that the proposal is good, but it has taken on an unfortunate political twist,” the DAP person said.
In June, the Minister of Finance Inc made a RM6.2 billion offer to take over the operators of the Lebuhraya Damansara Puchong (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Lebuhraya Shah Alam (Kesas) and the Smart Tunnel.
Lim had said that the takeover bid is being done in the name of public interest, and with the congestion charge system in place, the highways will be toll-free during off-peak hours and toll rates will be 30% lower outside of peak hours.
“This is because the government is not an organisation looking to make a profit. We have taken out the element of profit and are doing it for the public good unlike private enterprises which must make a return,” he said.
The minister stressed that the highway takeover move will not incur cost to the government and that toll rates would not be increased. This is because the takeover will be financed through bond issuance, with congestion charges used to pay off the debt. The plan will also see consumers save up to RM180 million in toll charges during the concession period, he added.
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