KUALA LUMPUR (Jan 2): Kumpulan Europlus Bhd (KEuro) has signed the concession agreement (CA) with the government for the construction of the RM7.07 billion West Coast Expressway between Banting, Selangor and Taiping, Perak.

In a statement to Bursa Malaysia on Wednesday, KEuro said it had signed the CA via its 80%-owned subsidiary West Coast Expressway Sdn Bhd (WCESB) .

The CA follows the government's approval letter issued last year allowing WCESB to undertake the privatisation of the expressway. "The CA sets out the final terms of the concession," KEuro said.

According to KEuro, the project involves the construction of a 316km highway, 233km of which will be tolled. The company said the project will include an additional 40km portion that will be built later.

The project is a joint venture between KEuro and IJM Corp Bhd, which holds the remaining 20% stake in WCESB. IJM also owns an estimated 23% associate stake in KEuro.

In a statement to Bursa in January last year, KEuro said the job would be undertaken under build-operate-transfer terms, and had a concession period of 60 years.

KEuro said that WCESB would be entitled to a government support loan (GSL) of RM2.24 billion, which begins in 2013 at an interest rate of 4% a year.

"[The] toll revenue in excess of an agreed traffic volume will be shared on the basis of 70:30 between the government of Malaysia and WCEB until full settlement of the GSL and subsequently 30:70 after the settlement of the GSL," KEuro announced at the time.

According to KEuro, WCESB is also entitled to an interest subsidy of up to 3% from commercial loans for 22 years. It also said the government would bear the land acquisition cost of up to RM980 million for the construction of the highway.