This article first appeared in The Edge Malaysia Weekly on September 14, 2026 - September 20, 2026

Building and operating highways is generally a tough business. There is heavy upfront capital expenditure involved and traffic builds up slowly over time.

The bulk of profits is made during the construction period. After that, the owner and operator of the concessionaire sees regular returns only after the highway is in operation and there is healthy traffic flow.

Construction company Lim Seong Hai Capital Bhd (KL:LSH) has received approval in principle for the implementation of an 8.2km highway from Bandar Malaysia to Seri Kembangan. The highway, called the Bandar Malaysia-Seri Kembangan Expressway (BSE), is estimated to cost RM1.75 billion.

This would work out to RM213 million per kilometre, about the same as for an elevated highway. At 8.2km, the BSE is marginally longer than the AKLEH Highway, which connects Jalan Sultan Ismail to Ampang.

The average toll rate for AKLEH is RM2.50 and below. The highway is one of the oldest urban toll roads and is owned by Permodalan Nasional Bhd (PNB), which has deep pockets and is prepared to take a long-term position on its investment.

How much toll can LSH impose for the proposed BSE? If the rates are too high, traffic flow would grow at a slower rate. After stripping out operating costs and interest expenses, would there be enough for a decent return?

LSH is no greenhorn in the construction business, having built and operated urban highways. The fact that it is looking at the BSE, which is still at the early stages of development, suggests the company probably has a game plan.

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