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Press Release
Ministry of Finance Malaysia


Proposed Acquisition Of Tolled Highways


Last Saturday, YAB Prime Minister announced that the Government has commenced talks with Gamuda Berhad to negotiate the acquisition of four highway concessions in which the company has a majority stake. The four highways involved are Lebuhraya Damansara Puchong (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Lebuhraya Shah Alam (KESAS) and SMART Tunnel (SMART).

As a percentage of the urban toll roads market (which excludes the PLUS group), the market share of these four highways based on the toll revenue collected is around 48%. This represents a significant share of the intra-city highways and indicates the Government’s seriousness and commitment to the first steps in fulfilling our election manifesto.

Upon the successful acquisition of these four highways, the Government will abolish the existing toll mechanism and replace it with a new “congestion charge” model. Under the new model, the congestion charge follows a variable pricing structure which depends on the time of the day. This new model will help to ease traffic congestion during the peak periods by encouraging commuters to plan and shift their commute to the less congested hours. In doing so, even those travelling at the peak hours will enjoy reduced traffic congestion compared to that faced today.

Initial projections estimate that commuters will save as much as RM180 million per annum immediately with the switch from toll to congestion charge. These savings go straight into the disposable income of Malaysian households.

Collection of the congestion charge will be sufficient to service the debt arising from the acquisition as well as to finance the operation and maintenance costs of the highways without requiring additional budget allocation by MOF.

In addition, the acquisition of these highways at a fair and reasonable price for the Government will also save taxpayers from having to pay compensation of approximately RM5.3 billion to toll concessionaires in order to freeze toll rate hikes until the end of the respective concession periods.

The proposed acquisition of these highways is a win-win-win solution for all involved:

    • the Government / taxpayers save RM5.3 billion in compensation to the toll concessionaires to continue freezing toll rate hikes;
    • commuters save up to RM180 million per annum with reduced traffic jam during peak hours; and
    • any surplus collection goes towards financing the upgrade and maintenance of our public transport system.

 

The Government expects the acquisition exercise of the four highways will take up to 6 months to fulfil legal, regulatory and financial requirements.

Sayangi Malaysiaku!

Lim Guan Eng
Finance Minister

Ministry of Finance Malaysia
Putrajaya
26 February 2019

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