KUALA LUMPUR: PLUS Malaysia Bhd is best run by a private company, said two corporate leaders bidding to take over the largest highway operator in the country.
Business tycoon Tan Sri Halim Saad, who has joined the growing list of parties keen to acquire PLUS with the highest bid of RM5.2 billion in cash, said it is high time for the government to hand over the public service operation to a private company.
Halim, in charge of the highways for several years, told the New Straits Times that since the government's "forced" takeover of PLUS from his Renong Bhd in 2001, there had been no toll fare reduction but only high debts that balooned to RM30.2 billion as at 2019.
"Since the takeover, the debts have folded almost 10 times the tender price of RM3.4 billion set in 1988. Only RM700 million (of debt) has been paid. Where did the money (cash from annual revenue) go?," he questioned.
The RM3.4 billion tender price was for the 30-year toll concession awarded to UEM/PLUS in 1988 by the government.
Halim claimed that when he left PLUS operation last nine years, the borrowings only stood at RM6 billion, five times less the operator's current debt.
Together with his partner Datuk Wong Gian Kui, Halim planned to acquire the entire stake in PLUS for RM5.2 billion.
Other than 25 per cent toll reduction, he stressed that under his proposal, Employees Provident Fund's expected returns would not be diluted if the pension fund wished to remain its 49 per cent stake in PLUS.
Earlier this month, Khazanah Nasional Bhd managing director Datuk Shahril Ridza Ridzuan said selling PLUS to private entities would be a “huge moral hazard”.
It would be difficult to imagine PLUS in private hands, especially if the offers were to acquire the asset at a cheap price and the government would still need to guarantee them, he added.
In a recent interview with the NST, another PLUS suitor RRJ Capital chairman Richard Ong said its value proposition was to modernise highway and provide "value for money" to road users.
He claimed since PLUS was first built, the highways were no longer up to scratch with traffic congestion being the main problem.
This was not the "value" that road users paid for, he added.
Ong implied that with private companies taking over PLUS, it would be efficiently run.
The Malaysian-led Hong Kong-based private equity firm had laid out a revised proposal to the government to acquire PLUS for RM3.5 billion.
Ong said he was willing to pay RM500 million in deposit in its bid to acquire PLUS.
“Yes, we are ready to place a RM500 million cash deposit as part of our bidding process. This amount we consider reasonable given that it constitutes 2.0 percent of PLUS's underlying assets," he told Berita Harian.
Other than Halim and RRJ Capital, Widad Group Bhd and Tan Sri Abu Sahid Mohamed of Maju Holdings Sdn Bhd were also interested to buy PLUS.
Khazanah was also said to have submitted its own proposal to the government for PLUS and other highways in Malaysia.