Concession restructuring a win for millions
KUALA LUMPUR:The government’s decision not to sell Projek Lebuhraya Utara-Selatan Malaysia Bhd (PLUS), but rather to restructure the concession agreement, is deemed a ‘win’ for millions of highway users.
Sunway University Business School economics Professor Dr Yeah Kim Leng said consumers stood to gain with the 18 per cent reduction in toll, especially when the rates would remain the same for 30 years.
‘The one-off 18 per cent reduction is sizeable.The toll rates will not generate any upward pressure on the consumer price index and cost of living.
‘Given rising overall inflation and income levels, the fixed toll burden as a share of household budget will decline over time and become affordable,’ he told the New Straits Times yesterday.
Yeah said with highway users having to pay toll for another 20 years, this would be a win for Khazanah Nasional Bhd (Khazanah) and the Employees Provident Fund (EPF).
‘They get to keep a valuable long-term asset that will continue generating revenue for another 20 years.’
He said the returns from the restructured concession would eventually be distributed to millions of EPF contributors.
‘This is less objectionable compared with having the ‘profits privatised and risks socialised’ if sold to private hands.’
Dr Yeah said the government’s total debt and debt servicing levels would breach prudent limits if it were to acquire the assets.
‘But being quasi-government bodies, the two shareholders, EPF and Khazanah, can buy out Gamuda Bhd’s assets.’
However, he said the objective of the acquisition should aim at abolishing tolls.
‘The government does not have surplus funds to make the acquisition and absorb the toll.
‘Hence, the ‘user-pay principle’ remains a sustainable approach to infrastructure development, given that other less developed parts of the country also need development,’ he said.
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