KUALA LUMPUR: The government will fund the acquisition of four tolled highways through the issuance of a bond, Finance Minister Lim Guan Eng said today.
Lim, who had on June 21 announced that the government had made a conditional offer to acquire the Kesas, LDP, Sprint and Smart highways at a total cost of RM6.2 billion, said today: “The proposed acquisition cost of RM6.2 billion will be funded by a bond issuance that is fully financed and paid for from the collection of congestion charges.
“This compares with having to pay RM18 billion in compensation for the highways to not collect any toll charges.”
Lim said in a statement that highway users would benefit by paying congestion charges, which would be significantly lower than current toll charges.
Users will get discounts of up to 30% for hours outside of peak periods and free travel during off-peak periods.
Lim said: “Due to legacy issues from the previous government leading to financial constraints, the federal government cannot afford to fork out RM18 billion.
“By issuing the RM6.2 billion bond at no cost to the federal government, there is a win-win solution because of the savings of at least RM5.3 billion in compensation to the four highways for freezing toll hikes.”
Saying questions had been raised as to why the government should acquire the highway concessions, which would expire between nine and 23 years, Lim explained that “highway users will pay a reduced congestion charge that can save them RM180 million annually”.
In addition, he said, the concession period would not be lengthened but would expire in accordance with the existing concession agreements.
Thirdly, upon expiry, the congestion charges will be further reduced significantly to cover only the operating and maintenance costs, without any profit element.
He added that the conditional offer, when approved by the shareholders and creditors of the four highway concessionaires, was still subject to Cabinet approval.
“Let me reiterate that the conditional offer is made after due diligence by professional banking consultants, in line with fulfilling the commitment by the Pakatan Harapan government in its electoral manifesto to take over highway concessions and gradually reduce toll rates, thereby easing the burden on the people.”