Highway users do not have to pay toll forever - Works Ministry

KUALA LUMPUR - Claims that highway users will be paying toll indefinitely following the restructuring of four companies with an extension of the concession period are untrue, according to the Works Ministry.

The ministry in a statement today said concessionaires cannot arbitrarily add on new debts as enshrined in the New Agreement involving the recent restructuring of the four concessionaires.

"The government will always ensure that consumers are not burdened.

"If this restructuring is not allowed in order that the government can save on compensation, then the toll rate increase has to be given, which will then cause a chain reaction where the cost of goods will increase as well," read the statement.

On April 4, Prime Minister Datuk Seri Ismail Sabri Yaakob announced the government's decision to maintain toll rates on four highways until the company's concession period ended.

The four highway concession companies are Kesas Sdn Bhd which manages the Shah Alam Expressway (Kesas), Stormwater Management and Road Tunnel (Smart), Western KL Traffic Dispersal System Sdn Bhd or Sprint and Lingkaran Trans Kota Sdn Bhd (Damasara-Puchong Highway or LDP).

In the same statement, the ministry also clarified on the alleged fixed cost for the construction and maintenance of the highways and extension of the concession period which has always been worrisome to consumers.

"This is a false and misleading statement. The government has never paid or provided allocations in the form of fixed costs for the construction or maintenance of the highways.

"Construction was done using funds obtained by the concession company through loans or the issuance of Sukuk which must be repaid through toll collection while the operation cost and maintenance is covered through toll collection," it said.

The statement also clarified that the extension of the concession period was given only as an indicator to assure Sukuk holders that their investment will be repaid.

"The earliest expiration date is six more years which is 2028 for Kesas, another eight years to 2030 for LDP, another 12 years to 2034 for Sprint and another 20 years which is 2042 for SMART. This is enshrined in the existing Concession Agreement. In this structuring, the extension given is not exclusive (to any of the our concession companies)," it said.

The ministry explained that with the restructuring, the toll rate will remain the same for a further period, in fact the government can also end the concession period at any time subject to its financial position to avoid an increase in the price of goods due to a rise in toll rate.

The statement also clarified the allegation against Amanat Lebuhraya Rakyat Berhad (ALR) which took over the highway assets worth over RM5 billion with a mere capital of RM5,000.

"The role of the ALR is solely as the custodian of the four highways. Prospective sukuk investors (or sukuk subscribers) need confidence to invest (for returns) and as such, the ALR consists of corporate figures who are not affiliated with any political party.

"This allows ALR with a capital of only RM5,000 to act as "guardian" of the four highways. In addition, since the original shareholders are no more and since ALR is non-profit, then no more dividend payment is required to be made and which thus allows the toll rate to be maintained at the existing rate,” it added. - BERNAMA