Gov’t negotiating with operators to avoid toll hikes on 19 highways, extension of concession period likely

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The government has started negotiating with toll concessionaires with the aim of maintaining or reducing toll charges on 19 highways, according to deputy works minister Abdul Rahman Mohamad, reported by The Edge. The concessionaires include Amanat Lebuhraya Rakyat (ALR), Projek Lintasan Kota Holdings (Prolintas), IJM, ANIH and PLUS. He did not specify which highway deals are currently being negotiated.

In 2022, ALR took over four highways from Gamuda and now controls the LDP, Sprint, Kesas and Smart Tunnel. Prolintas holds six concessions including the AKLEH, Guthrie Corridor Expressway, LKSA, Kajang SILK, SUKE and DASH highways. IJM holds four concessions, namely the Besraya, NPE, LEKAS and the West Coast Expressway under WCE Holdings.

PLUS holds concessions for the North-South Expressway, NKVE, Seremban-Port Dickson Highway, North-South Expressway Central Link and the Butterworth-Kulim Expressway. The Malaysia-Singapore Second Link and Penang Bridge are also in the group’s portfolio.

Gov’t negotiating with operators to avoid toll hikes on 19 highways, extension of concession period likely

The main highway from KL to the east is split into two – ANIH handles the KL-Karak Highway and LPT1, while Phase 2 of the LPT (LPT2) is operated by LPT2 Sdn Bhd.

Abdul Rahman said that any proposal to restructure concession agreements hinges on discussions with concessionaires and the government, subject to approval from the finance ministry.

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 added.

Gov’t negotiating with operators to avoid toll hikes on 19 highways, extension of concession period likely

“However, such proposals require comprehensive studies, and it has been estimated that abolishing tolls nationwide would cost around RM400 billion,” the Lipis MP said. The RM400 billion figure has been mention before, and dates back to a couple of administrations.

The business publication said that Abdul Rahman’s statement confirms its report in May that said 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, its sources said.

Negotiations are needed because the concessionaires have legal rights to increase toll fares, according to the their respective deals. In order for toll fares to not increase, the government has to compensate the concessionaires using taxpayers’ money. For instance, last year, the government coughed out RM861.22 million to maintain toll rates. A card the government can play is to grant extensions to the concession period – they can collect less, but collect for longer.

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