Un-tolled joy or un-told joy?

ARCHIVES 2011

By admin-s On Jan 31, 2011

Lo and behold, it is about 24 1/2 years, calculating from 2011 onwards, it covers profits up to 2035 while the 2 concessions will end July and December 2032.

By Lee Wee Tak

The Star with its 29th January 2010 headline screamed “un-tolled” joy.

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http://www.starproperty.my/PropertyScene/PropertyNews/9896/0/0

Toll abolished on one stretch, no rates hike on two highways

PUTRAJAYA: Toll for the Salak to Taman Connaught stretch of the East-West Link Expressway is set to be abolished by May, Datuk Seri Najib Tun Razak announced.

The Prime Minister also announced that the toll rates for the Kuala Lumpur–Karak Expressway and East Coast Expressway Phase One would not be increased for the next five years.

He said the decisions were made following a review of transportation costs, including restructuring the toll charges and to ease the people’s burden.

He also added that no compensation would be paid to the concessionaires of the three highways.

“In line with the 1Malaysia spirit, People First, Performance Now, I have asked toll concessionaires to carry out a review of the respective toll charges to help the Government prosper the country and lessen the burden of the people.

“Taking up the Government’s call, two corporate figures who are also major shareholders of a toll concessionaire, came forward with a toll restructuring proposal through the acquisition of assets, which will benefit the people,” he told a press conference at his office here yesterday.

Also present was Works Minister Datuk Shaziman Abu Mansor

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An early nice Chinese New Year surprise for the toll hating Chinese community before Tenang by-election?

MTD Capital Berhad operates the above 2 tolled highway until 2032 with another one (not acquired by the directors in this exercise) until 2018.

Below is a screen shot of the letter of offer, announced by MTD Capital Berhad in Corporate Announcement section of the Bursa’s website as required by the listing requirements.

According the the offer above, the 2 directors via a Special Purpose Vehicle will pay MTD RM3.525 billion in cash to buy the 2 concessions. I get a bit worried whenever I see the term SPV and any government linked initiative in the same article. Not sure why.

The question is, how is this SPV (i.e. entirely new company, starting from zero) going to raise the RM3.525 billion? Is it from bank loan guaranteed by government? Government loan? EPF investment? Khazanah contribution? Either way, the rakyat is going to finance this either via tax money or hard earned deposits with commercial banks. It looks unlikely that some rich entrepreneur came up with the cash elsewhere.