Note: An earlier version of the story incorrectly reported that negotiations are still ongoing to restructure highway concessions held by Amanat Lebuhraya Rakyat Bhd (ALR), Projek Lintasan Kota Holdings Sdn Bhd (Prolintas), IJM Corp Bhd, ANIH Bhd and PLUS Malaysia Bhd. The error is regretted.
KUALA LUMPUR (Nov 17): The government has restructured toll concessions for 19 highways in the country so far to avoid toll hikes, following negotiations with concession holders as part of a Cabinet decision made on Dec 18, 2020.
It is also negotiating the same for other highways, including the East Coast Highway Phase 2 (LPT2), which will take time to be finalised due to the involvement of the government, concessionaire companies, and financial institutions, according to Deputy Works Minister Abdul Rahman Mohamad.
The LPT2 is managed and operated by Lebuhraya Pantai Timur 2 Sdn Bhd (LPT2 Sdn Bhd).
The minister, however, did not elaborate on the other highways for which toll restructuring is being negotiated.
The Edge previously reported in May that 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.
The 19 aforementioned highways saw restructuring done to cap or lower toll charges, which the government anticipates could save RM53.78 billion in compensations by the government throughout the concession period, the deputy minister told the Dewan Rakyat on Thursday (Nov 17).
The highway concessionaires include Amanat Lebuhraya Rakyat Bhd (ALR), Projek Lintasan Kota Holdings Sdn Bhd (Prolintas), IJM Corp Bhd, ANIH Bhd and PLUS Malaysia Bhd.
Some highway concessions allow for staggered increases in toll charges during the concession period.
Prior to any restructuring of the concessions, the government would compensate concessionaires in exchange for not increasing the toll charges according to the schedule in the concession agreement.
When concession agreements are restructured to cap or reduce toll charges, highway concessionaires are typically compensated through extension of concession periods, as seen in some highways under ALR and PLUS in the past.
ANIH operates the Kuala Lumpur-Karak Highway and the East Coast Highway Phase 1 (LPT1).
Prolintas holds six concessions including the Ampang-Kuala Lumpur Elevated Highway (AKLEH), Guthrie Corridor Expressway (GCE), Kemuning-Shah Alam Highway (LKSA), Kajang SILK Highway, Sungai Besi-Ulu Kelang Elevated Expressway (SUKE) and Damansara-Shah Alam Elevated Expressway (DASH).
IJM holds four concessions in Malaysia, namely the Sungai Besi Expressway (Besraya), New Pantai Expressway (NPE), Kajang-Seremban highway (LEKAS) and the West Coast Expressway (WCE) under WCE Holdings Bhd.
PLUS, meanwhile, has five highway concessions namely the North-South Expressway, New Klang Valley Expressway (NKVE), Seremban-Port Dickson Highway, the North-South Expressway Central Link and the Butterworth-Kulim Expressway.
PLUS also holds concessions for the Malaysia-Singapore Second Link and the Penang Bridge.
ALR took over four highway concessionaires in 2022, which hold the concessions for the Damansara-Puchong Expressway (LDP), Sprint Expressway, Kesas Expressway and the SMART Tunnel.
Abdul Rahman emphasised that any proposal to restructure concession agreements hinges on discussions with concessionaires and the government, subject to approval from the Ministry of Finance.
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 said.
"However, such proposals require comprehensive studies, and it has been estimated that abolishing tolls nationwide would cost around RM400 billion," Abdul Rahman said.
In 2022, the government absorbed approximately RM435 million in exchange for no toll increases, he added, without providing further details.
Meanwhile, Abdul Rahman said the two-day toll-free period nationwide for Deepavali involved a total cost of RM30 million.
"I wish to express gratitude to the Prime Minister cum Minister of Finance Datuk Seri Anwar Ibrahim for approving the toll waiver in conjunction with the Deepavali celebration, which involved a cost of RM30 million," he said.
This was in response to Ahmad Fadhli Shaari's (PN-Pasir Mas) enquiry about the government’s expense for the toll-free days.
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