Khazanah hands in proposal on toll highways

By THE STAR | 20 August 2019

PETALING JAYA: Khazanah Nasional Bhd says it has submitted a proposal on toll highways to the government alongside several other proposals from various parties.

“There have been several proposals on toll highways submitted to the government, including from Khazanah.

“It is up to the government to consider and decide on these proposals, ” said the sovereign wealth fund in a statement.

It has been reported by an English daily that the government has received a fresh proposal to take over 15 highways, including PLUS Malaysia Bhd, for a total of RM43bil.

The report said, quoting sources, that under the proposal, Khazanah would set up a special-purpose vehicle (SPV) to be named as “highway trust” and act on behalf of the government to buy all the toll highway concessionaires.

The SPV would then raise debt papers to take over the highways.

The proposal would see the government offering to buy highways, including PLUS Malaysia, for RM30.8bil; Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) for RM3.1bil; Gamuda Bhd for RM5.6bil; and IJM Corp Bhd for RM2.7bil.

However, it is still unknown who had come up with the recent proposal.

Analysts pointed out that the likelihood of Gamuda accepting the offer was dim, as the company has given its nod to the offer proposed by the Finance Ministry.

“Furthermore, the Employees Provident Fund is likely to turn down any offer that doesn’t value PLUS adequately, which takes into account the debt and future cash flows of its highways, ” an analyst said.

The government, on June 21, announced a RM6.2bil offer to acquire four toll concessionaires - Lingkaran Trans Kota Holdings Bhd (Litrak), Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd (Sprint), Kesas Sdn Bhd and Projek SMART Holdings Sdn Bhd. Gamuda owns a 44% stake in Litrak, 52% in Sprint, 70% in Kesas and 50% in SMART.

Based on Gamuda’s effective interest in these toll highways, the proposal values Gamuda’s highway assets at RM2.36bil.

PLUS received a proposal in 2017 from Tan Sri Abu Sahid Mohamed of Maju Holdings Bhd to buy the group for RM37bil, including taking over RM30bil of PLUS’ debts. PLUS is the biggest highway concessionaire in the country, operating eight expressways under five concessions.

Its highways are the 772km North-South Expressway, which runs from Bukit Kayu Hitam in Kedah near the Malaysia-Thai border to Johor Baru; the New Klang Valley Expressway; Federal Highway Route 2; the Seremban-Port Dickson Highway; the NSE Central Link; the Malaysia Singapore Second Link; Lebuhraya Butterworth-Kulim and the Penang Bridge. Its concession is expiring in December 2038.

It has been reported that Abu Sahid is submitting a fresh proposal that entails buying out PLUS from the government with a promise to reduce toll rates by running the highway more efficiently.