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Govt Confirms in Talks with Concessionaires to Avoid Toll Hikes on 19 Highways

The government has initiated negotiations with toll concessionaires to restructure toll collection on 19 highways as per the Cabinet's decision on Dec 18, 2020, with the aim of maintaining or reducing toll charges, according to Deputy Works Minister Abdul Rahman Mohamad.

The highways concessionaires include Amanat Lebuhraya Rakyat Bhd (ALR), Projek Lintasan Kota Holdings Sdn Bhd (Prolintas), IJM Corp Bhd, ANIH Bhd and PLUS Malaysia Bhd.

Negotiations for other highways, including the East Coast Highway Phase 2 (LPT2), are ongoing and will take time to finalise due to the involvement of the government, concession companies and financial institutions, Abdul Rahman said during the oral question and answer session at Dewan Rakyat on Thursday.

The minister, however, did not elaborate on the specific highways for which toll restructuring are being negotiated.

This confirms a report by The Edge that the government is looking at extending the concession period for all highways in Peninsular Malaysia to avoid toll hikes. The extension could be as long as 30 years, subject to cabinet approval.

The LPT2 is managed and operated by Lebuhraya Pantai Timur 2 Sdn Bhd (LPT2 Sdn Bhd), whereas ANIH operates the Kuala Lumpur-Karak Highway and the East Coast Highway Phase 1 (LPT1).

Prolintas holds six concessions including the Ampang-Kuala Lumpur Elevated Highway (AKLEH), Guthrie Corridor Expressway (GCE), Kemuning-Shah Alam Highway (LKSA), Kajang SILK Highway, Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) and Damansara-Shah Alam Elevated Expressway (DASH).

IJM holds four concessions in Malaysia namely the Sungai Besi Expressway (Besraya), New Pantai Expressway (NPE), Kajang-Seremban highway (LEKAS) and the West Coast Expressway (WCE) under WCE Holdings Bhd.

PLUS, meanwhile, has five highway concessions namely the North-South Expressway, New Klang Valley Expressway (NKVE), Seremban-Port Dickson Highway, the North-South Expressway Central Link and the Butterworth-Kulim Expressway. PLUS also holds concessions for the Malaysia-Singapore Second Link and the Penang Bridge.

ALR took over four highway concessionaires in 2022, who hold the concessions for the Damansara-Puchong Expressway (LDP), Sprint Expressway, Kesas Expressway and the SMART Tunnel.

Abdul Rahman emphasised that any proposal to restructure concession agreements hinges on discussions with concessionaires and the government, subject to approval from the Ministry of Finance.

Decisions regarding toll rates must be made holistically and conclusively, considering their significant financial implications and the need to maintain investor confidence, comply with concession agreement terms, and ensure the concessionaire's responsibility for highway assets' management and costs, ultimately alleviating the government's future financial burden, he said.

"However, such proposals require comprehensive studies, and it has been estimated that abolishing tolls nationwide would cost around RM400 billion," Abdul Rahman said.

In 2022, the government absorbed approximately RM435 million in exchange for no toll increases, he added, without providing further details.

Meanwhile, Abdul Rahman said the two-day toll-free period nationwide for Deepavali involved a total cost of RM30 million.

"I wish to express gratitude to the Prime Minister cum Minister of Finance Datuk Seri Anwar Ibrahim for approving the toll waiver in conjunction with the Deepavali celebration, which involved a cost of RM30 million," he said.

This was in response to Ahmad Fadhli Shaari's (PN-Pasir Mas) enquiry about the government’s expense for the toll-free days.

Source: The Edge Markets

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