The Malaysian Insider

KUALA LUMPUR, Oct 11 – Both the Federation of Malaysian Consumers Assocation (Fomca) and Pan Malaysia Lorry Owners Association (PMLOA) are opposing the RM50 billion proposal by Asas Serba Sdn Bhd to acquire the country’s 22 tolled highways.

Er Sui See, President of PMLOA said it would not be wise to allow Asas Serba or other unknown entities to buy over toll concessions as roads were public amenities, where the government must have some control over.

“RM50 billion is a big amount and there are already doubts as to how Asas Serba would finance the acquisition.

“There are just too many uncertainties on the table at the moment and given that RM50 billion is no small change, there’s no guarantee that Asas Serba would not seek government assistance later to service the loan,” he told Bernama here. As to Asas Serba’s proposal that it would lower toll rates in perpetuity by

20 per cent in return for a longer concession period, Er once again said there was no guarantee for this promise.

Fomca’s Vice President, Muhammad Sha’ani Abdullah who shared a similar view said that roads and highways were public amenities and should not be used as a tool for bartering. He said toll concessions were seen as a lucrative business for not only concessionaires get to collect tolls from motorists but they also get compensation from the government, thus making them a target for takeover.

“To counter this and to protect consumers and road users, the government should control and have some ownership of toll highways throughout the country, so that the price of toll is standardised just like petrol prices are controlled.

“These profits can then be channelled for the good of the public,” he said.

According to Muhammad Sha’ani a good highway network should be a part of a country’s infrastructure which contributes to the social and economic development of the people, not just for those who can afford to pay to use it.

In the middle of this year, Asas Serba proposed to the Works Ministry that it would acquire all 22 highway concessionaire companies for a staggering RM50 billion.

Asas, a low-profile company manned by four businessmen, two of whom are former senior executives of the Renong conglomerate.

Before it was nationalised in 2001, Renong owned Plus Expressways, Malaysia’s largest concessionaire firm which manages a highway running down the length of peninsular Malaysia.

Of the 22 companies, only Plus is owned by the government, with the rest being held by private firms, some listed on the stock exchange.

Given that position, analysts described Asas’ bid as hinging on the acquisition of Plus, which is 64 per cent owned by United Engineers (Malaysia) Bhd. UEM is, in turn, is wholly owned by Khazanah Nasional, a government investment arm.

The only thing going for Asas’s bid is its promise to lower toll rates by 20 per cent while lessening the Government’s subsidies by some RM114 billion. But, in return, it wants a longer concession period as rising toll rates have been deeply unpopular.

However, the Minister in the Prime Minister’s Department, in charge of the Economic Planning Unit, Tan Sri Nor Mohamed Yakcop, recently denied that a private firm was offering to buy out Plus.

Nor Mohamed’s dismissal of the offer has diminished Asas’ chances in the view of many analysts.

In addition, the privatisation of Plus would make the stock exchange lose a big-capitalisation firm and the largest toll-highway company in South-East Asia. – Bernama

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