Latest toll freeze hinges on concession buyout

By Lee Wei Lian, The Malaysian Insider

KUALA LUMPUR, Jan 29 — Ending and freezing of toll rates on three expressways operated by MTD Capital Bhd’s units will depend on the successful buyout of the concessionaires by two of its directors, according to documents filed with Bursa Malaysia.

Datuk Seri Najib Razak announced yesterday that there will be no toll rates hike for the East-West Highway Phase 1 and KL-Karak Highway for five years while the East-West Link expressway will be toll-free in May, months after the prime minister made a similar announcement for the Plus expressways.

In their filing to Bursa Malaysia yesterday, MTD Capital’s group executive chairman and CEO, Datuk Nik Hussain Abdul Rahman and Datuk Azmil Khalili Datuk Khalid offered to acquire the business, assets and liabilities of MTD Capital subsidiaries MTD Prime and Metramac for approximately RM3.5 billion in cash.

The prime minister said that the two corporate figures were responding to the government’s call for toll concessionaires to review their respective toll structures to help the country prosper and lower the burden on the public.

“Taking up the Government’s call, two corporate figures who are also major shareholders of a toll concessionaire, came forward with a toll restructuring proposal involving the acquisition of concession’s assets, a move that will give a major impact to the people,” Najib said in a press conference today.

He added that there will be no extension to the concession period and no compensation from the government for freezing tolls rates for 5 years for the East-West Highway and KL-Karak Highway and ending toll collection along the East-West Link expressway this year instead of 2018 as scheduled.

Najib also urged other toll concessionaires to take up similar initiatives for the public’s benefit.

Despite the prime minister’s assurances however, that there will be no compensation, industry observers have wondered privately whether the MTD chairman and CEO are doing “national service” or whether there are other forms of compensation involved.

In his 10th Malaysia Plan speech in June 2010, Najib announced that the government will go ahead with seven highway projects at an estimated cost of RM19 billion.

Among the new highway projects are the West Coast Expressway, Guthrie-Damansara Expressway,  Sungai Juru Expressway and Paroi-Senawang-KLIA Expressway which some analysts say could go to MTD Capital, which is the country’s second biggest toll concessionaire.