CAP urges Putrajaya to retract MoF offer for tolled highways

CAP warned that Putrajaya would only push up the government’s debts. “It has to raise RM6.2 billion through issuing bonds and pay RM220 million per annum as interest,” said Mohideen.

(FMT) – The Consumers’ Association of Penang (CAP) has urged the government not to approve an offer by the finance ministry (MoF) to buy four highways from construction giant Gamuda, saying it will defeat the purpose of lightening the burden of motorists in paying tolls.

“The reason for the government acquiring the tolled highways is to put an end to these lopsided concessions in order to benefit the consumers and the government. MoF’s offer does not meet this objective,” CAP acting president Mohideen Abdul Kader said.

He suggested that the government find a solution to end toll concessions by consulting a committee of experts.

He said the MoF offer of RM6.2 billion to Gamuda and Lingkaran Trans Kota Holdings Bhd (Litrak) was tantamount to “over-paying the highway operators”, adding that the benefit for highway users would also be prohibitive.

“Under MoF’s offer, the over one million highway users would enjoy savings of RM180 million per year which works out to less than 50 sen a day per user, not enough to buy a cup of coffee.

“Even after the acquisition, they have to pay a congestion charge during the six peak hours, equivalent to the maximum of the current toll rate,” he added.

The government made the offer as a follow-up to its election promise to acquire the Damansara-Puchong Highway (LDP), Kesas, Sprint highway and SMART Tunnel.

But Mohideen said fulfilling the pledge “should not lead to windfall gains for the toll concessionaires” that would burden the government and the people.

In a Bursa Malaysia filing, Gamuda said it anticipates the purchase consideration for the expressway concession companies to be RM1.23 billion for Kesas, RM870 million for Sprint, RM2.34 billion for Litrak and RM60 million for SMART.

Meanwhile, Litrak said MoF had also offered RM2.47 billion to buy all its securities from the Gamuda associate.

CAP warned that Putrajaya would only push up the government’s debts.

“It has to raise RM6.2 billion through issuing bonds and pay RM220 million per annum as interest,” said Mohideen.

He also cited concerns that a decline in traffic on the highways due to increased use of public transport would mean lower revenue and losses.