Pakatan Rakyat partner DAP has unveiled a proposal that can make the North South Expressway toll free by 2016.
DAP’s Restructure Toll Rates and Equity team - codenamed Restore - has called on called on Finance Minister Najib Abdul Razak and Works Minister Mohd Zin Mohamed to study the proposal and include the plan under the mini-budget due to be tabled on March 10.
“It is a very creative proposal, we strongly we believe that it would work. It doesn’t cost the government anything and it brings tremendous amount of benefits for all Malaysians,” said Petaling Jaya Utara MP Tony Pua.
“We call upon the Finance Minister to work together with the Works Minister to make this proposal a reality because it brings a lot of benefits, not just to normal road users, but what it actually creates for the economy is enormous.”
Buyng over PLUS for RM13.75 bln, funding with MGS
DAP Restore believes that the government can buy over concessionaire PLUS Expressways Bhd through issuance of government bonds, which can be repaid by toll collection within six years.
PLUS, in which state investment arm Khazanah has a 65 per cent stake in, also operates ELITE, Butterworth-Kulim (BKE) and the Second Link highways.
DAP’s plan centres around the government making a general offer to acquire all minority shareholders of PLUS with 15 per cent premium at RM3.30 per share.
Such an offer is considered generous as PLUS was listed on Bursa Malaysia at a price of RM2.88 per share, said Teh Chi-Chang, economic advisor to DAP secretary-general Lim Guan Eng.
The payout for this share offer would amount to RM5.2 billion, and ensure that minority shareholders are protected. Added to the RM8.5 billion net debt of PLUS, the total cost of acquisition would amount to RM13.75 billion.
Teh said this could be funded by issuing Malaysian Government Securities at 3 percent interest per annum, costing RM413 million in annual interest. Total repayment would amount to RM16.2 billion over six years.
Meanwhile, PLUS would also be generating at least RM20 billion in net positive cash flow in the six years to 2015 - even without further toll rate hikes. Therefore, the government would be able to repay the MGS and still have excess cash of RM3.8 billion, he added.
Saving billions of ringgit and making it easier for businesses
Teh said under the DAP plan, Malaysian taxpayers would not be burdened by additional costs and the expressways would be restricted to collecting tolls to only up till 2015.
Pua also said the RM4 billion saved by Malaysian consumers would reduce the cost of living for the average rakyat during the current economic turmoil.
“The billions saved can also be redirected to other more productive sectors of the economy. The abolishment of the toll rates can substantially reduce the cost of doing business in Malaysia and increase logistical efficiencies.
“This will increase the competitiveness and efficiency of Malaysian companies in the midst of an economic crisis where it is critical for us to support the people,” Pua said.