KUALA LUMPUR: The government’s potential takeover of 15 highways including North South Expressway and those linked to Gamuda Bhd for RM43 billion has left some economists and highway users intrigued with positive views.
As they await further details on the prospect, economists contacted by the New Straits Times today believe that commuters would be the winner from such takeover.
However, their concern was the ability of Khazanah Nasional Bhd’s special purpose vehicle (SPV) to cover the operation cost and coupon payment to debt paper holders.
On Monday, the NST quoted sources saying that the government would offer to buy highways owned by Plus Malaysia Bhd including NSE for RM30.8 billion, as well as those by Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) for RM3.1 billion, Gamuda for RM5.6 billion and IJM Corp Bhd for RM2.7 billion.
The possible acquisitions would be paid via issuance of debt papers to the concessionaires.
The SPV would buy the concessions by RM10 billion cash and RM20.1 billion debt, both via Paper A, and the remaining RM12.7 billion via Paper B.
Putra Business School associate professor and business development manager Dr Ahmed Razman Abdul Latiff said from the users’ perspective, they would theoretically come out winners as they will enjoy significant toll discounts and free toll starting 2038.
It would also look like a good proposal for the government because it will not have to fork out RM43 billion to implement the buyout, he added.
However, Razman warned that the SPV needed to ensure it has enough surplus annually to cover the coupon payment, maintenance of the highways and operating expenses as well as accumulate reserves for eventual redemption of those debt papers.
“The ability to do this will only be clear if the government can provide the traffic projection and potential revenue for the highways until 2038 so that there is less risk of government bailout if this SPV is unable to meet annual debt commitment,” he said.
The assumption is not taking into consideration of future expansion or upgrading of the highways which will require additional funding, he added.
If it is to fully abolish the toll, the SPV will not have enough financial room to pay for the maintenance and the debts for the construction of the highway.
Razman said it would be a good initiative by the government to use artificial intelligence to determine the toll discounts and maximise potential revenue, and at the same time offer off peak discounts.
Economist turned entrepreneur Izzuddin Yussof has the same concern for the SPV i.e if it would have enough financial room to pay for the maintenance and debts for the highways.
“The more likely scenario is for them to maintain the rate or reduce the rate a little bit,” he added.
Some users, meanwhile, are receptive to the possible takeover.
R. Rasyid, an engineer, expects to see immediate reduction of toll rates within the next 18 years or so.
M .Jeevanesan, 28 years old, hopes to see an improvement in infrastructure once such takeover happens.
“Traffic congestion and road accidents are making road journeys increasingly intolerable and dangerous especially for two-wheel riders.
“The poorly maintained roads with potholes and unsystematic road lanes are undoubtedly prone to accident,” he said.
B. Julianna, a special kid educator, hopes the government will consider widening major highways with heavy traffic flows, especially during festive seasons.
“It takes up to 12 hours to reach Penang during festive season and this is purely because of unsystematic management of lanes and roads in highways.”
R. Azmirah, meanwhile, said she was unsure on what to expect on the issue but eagerly waiting for it to be executed and benefit from it.