MAJU Holdings will not raise toll rates for 20 years if its offer to take over highway operator PLUS Malaysia Bhd is successful, said founder and group executive chairman Tan Sri Abu Sahid Mohamad.
“The existing concessionaire will run for the next 20 years till 2038. We will maintain the rates until the end of the concession period.
“We are comfortable with the toll rates right now and we can maintain the roads with what’s already being charged,” Abu Sahid told the NST Group in an exclusive interview on Wednesday.
UEM Group Bhd owns a 51 per cent stake in PLUS and the Employees Provident Fund (EPF) the balance.
There are 94 toll plazas on the expressways operated by PLUS, stretching from Bukit Kayu Hitam in Kedah to Tanjung Kupang and Bangunan Sultan Iskandar in Johor.
A previous report stated that in 2014, the annual traffic volume for PLUS was some 506 million vehicles while it collected RM2.61 billion in total revenue.
An average 50 per cent of the PLUS toll revenue was used for loan repayments, 20 per cent for operations and maintenance, 15 to 20 per cent for upgrading and repairing work and 10 per cent as returns to shareholders.
Abu Sahid said he would also draw on the experience of Maju Expressway Sdn Bhd, the operator of the 26km Maju Expressway (MEX), to manage the almost 1,000km of highways under PLUS.
Besides lighting up the entire network, he wanted to introduce “double decking” or elevated highways to lessen traffic congestion, especially on the Federal Highway.
“In fact, I thought of proposing this ‘double decker’ idea to them (PLUS) prior to this, but I didn’t because the Batu Tiga toll and highway belongs to them and it will create a lot of confusion. However, with MEX, we have demonstrated that building elevated highways is part of our (Maju’s) expertise,” he said.
“Most people are unaware that the entry point of our highway into Bukit Jalil is on an elevated road that is six storeys high. So, yes we do know how to do elevated highways,’” he added.
MEX stretches from Kuala Lumpur to Putrajaya, Cyberjaya and the Kuala Lumpur International Airport in Sepang.
Maju Holdings is offering RM36 billion in cash to UEM and EPF for their stakes in PLUS. It had sent its offer in a non-binding letter of intent via Evercore Asia Ltd.
PLUS’ current concessions are Projek Lebuhraya Utara-Selatan Bhd, Expressway Lingkaran Tengah Sdn Bhd, Linkedua (M) Bhd, Konsortium Lebuhraya Butterworth-Kulim Sdn Bhd and Penang Bridge Sdn Bhd.
Asked how Maju would be making profit on the back of planned upgrading works while not raising the toll rates, Abu Sahid that he expected profits to be made from improved efficiencies.
“We believe we can save a lot of money from the efficiency and savings. PLUS’ overhead right now is very high and we are planning to cut that down to half. If we can make a profit of RM200 million to RM300 million and save a lot on cost, that would be good enough,” he said.
By being the sole owner and operator of the country’s highways, Abu Sahid said he was expecting tremendous spillover
opportunities for Maju’s other business segments, including construction, property, services, manufacturing and infrastructure.
“We could even look at starting new property developments. We can build roads from the main highways into these new developments under our property unit, Maju Assets Sdn Bhd,” he said.
“In fact, we can also look into building new rest and relax (R&R) areas, or just refurbish existing ones.”
PLUS manages 24 R&Rs along its highways.