~ By Asrul Hadi Abdullah Sani
KUALA LUMPUR, Feb 25 – DAP claims that the government can make the North South Expressway toll free by 2016.
DAP Restructure Toll Rates and Equity (Restore) team believes that the government can buy over PLUS through government bonds, which can be repaid by toll collection within six years.
PLUS Expressways Bhd, which state investment arm Khazanah has a 65 per cent stake in, also operates ELITE, Butterworth-Kulim (BKE) and the Second Link Highways.
Teh Chi-Chang, economic advisor to DAP’s secretary-general, explained that they will propose to the government to make a general offer to acquire all minority shareholders of PLUS with a generous offer of 15 per cent premium at RM3.30 per share, costing RM5.2 billion, therefore ensuring that minority shareholders are protected.
This offer is considered generous considering PLUS was listed on Bursa Malaysia at a price of RM2.88 per share, he said.
The proposal will not incur additional costs to the Malaysian taxpayers and the expressways will continue to collect tolls only until 2015.
The cost of acquisition, added to the RM8.5 billion net debt of PLUS, will amount to RM13.75 billion.
Teh said the cost can be funded by issuing Malaysian Government Securities (MSG) at 3 per cent interest costing RM413 million per annum.
Total repayment will amount to RM16.2 billion over six years.
PLUS will also be generating at least RM20 billion in net positive cash flow in the six years up to 2015 without further toll rate hikes.
Therefore, by 2015, the government can completely repay the MGS and still have excess cash of RM3.8 billion.
“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,” Petaling Jaya Utara MP, Tony Pua, said.
He said the RM14 billion saved by Malaysian consumers will reduce the cost of living for the average Malaysians in 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 Malaysian people,” Pua said.
The plan aims to stimulate demand and make substantial funds available for public infrastructure development without the government having to increase the budget deficit further.
DAP has called upon both the finance and works ministers to include the proposal in the proposed mini-budget set to be announced on the 10th of March.
“We call upon the finance minister as well 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,” said Pua.
Taken from The Malaysian Insider.
[The Sun] Buy PLUS shares, toll-free after 2015 : DAP
~ by Giam Say Khoon
KUALA LUMPUR (Feb 25, 2009) : The DAP today proposed that the government makes a general offer to acquire all minority shares of the North-South Expressway (NSE) concessionaire, PLUS Expressways Bhd, and make the highway toll-free after 2015.
Economic adviser to the DAP secretary-general ,Teh Chi Chang said since the government via Khazanah, a government-linked company, owns 65% of PLUS, which is listed on Bursa Malaysia at a price of RM2.88 per share, the government can make a general offer to acquire all minority shares with a generous 15% premium at RM3.30 per share, costing RM5.25 billion to ensure that the shareholders are protected.
He said the cost of acquisition added to the RM8.5 billion net debt of PLUS by the government will amount to RM13.75 billion.
“This cost can be funded by issuing Malaysian Government Securities (MGS bond) at 3% interest (or lower) and the total repayment will amount to RM16.2 billion (principle plus interst) over six years.
“At the same time, PLUS should generate at least RM20 billion in net positive cash flow in six years (until 2015) without further toll rate hikes and a conservative 3% per annum traffic growth,” he told a press conference in Parliament lobby with DAP information chief Tony Pua (DAP-Petaling Jaya Utara) and Teo Nie Ching (DAP-Serdang).
Teh said therefore by 2015, the government can completely repay the MGS and still have RM3.8 billion excess which could be used to build a better public transportation system throughout the country.
Pua said the party’s proposal to the federal government will not impose further increase in the NSE toll rates and create about RM14 billion savings for Malaysians from 2009-2015.
“(With no more toll rate hikes until 2015,) a return KL-Penang journey will remain at RM86.60 today instead of RM115.30 in 2015 and RM168.80 by 2030,” he said.
“The proposal will allow the collection of toll only until 2015 and incur no additional cost for the Malaysian government or the people,” he added.
Pua said the RM14 billion saved will reduce the cost of living for average Malaysians in times of economic difficulties and redirect expenditure to other more productive sectors of the country’s economy by increasing domestic consumer demand.
“The reduced toll rates and subsequent abolition will substantially reduce the cost of doing business in Malaysia, increase logistical efficiencies and ultimately make Malaysian companies more globally competitive.
“The plan will also stimulate demand and make available substantial funds for public infrastructure development without the government having to increase the precarious budget deficit further,” he added.
Pua said the party hopes the Finance Ministry and Works Ministry will include the proposal in the mini budget set to be announced on March 10 for the benefit of the government and people.
He also urged Works Minister Datuk Seri Mohd Zin Mohamed to declare the compensation promised to the concessionaires for the abolition of the Salak Jaya toll operated by Besraya (M) Sdn Bhd and PJS2 (Kuala Lumpur-bound) toll of the New Pantai Expressway recently.
“We want to see if the compensation involved is equivalent to the tolls that would have been collected,” he said.
Taken from Sun2surf.com.