Many politicians and analysts are in agreement that
recent calls for the nationalisation of Malaysia's longest highway that
stretches from the Thai border to Singapore are illogical as the
North-South Expressway (NSE) was nationalised four years ago.
This happened when PLUS was delisted from Bursa Malaysia and fully taken
over by the government via two agencies - the Employees Provident Fund
(EPF) and Khazanah-owned UEM Group Bhd.
While efforts are now underway to prise PLUS away from government
ownership, politicians and economists are in agreement that it should
stay in government hands, given that this is a critical national
infrastructure spanning the length of Peninsular Malaysia.
The recent unsolicited offer from Idaman Saga Sdn Bhd, which was
rumoured to have roped in another government-linked entity, to take over
the ownership of the nation's most lucrative highway concession has
once again seen calls for nationalisation from both sides of the
political divide.
What seems to be forgotten is that the 772km NSE that forms the backbone
of the country's road network, together with all the highways under the
purview of PLUS Malaysia Bhd, had already been nationalised since 2010
following calls from the people.
The unsolicited offer, which lacks an offer price from Idaman Saga, a
private vehicle of Tan Sri Halim Saad, among other things, includes a
sweetener: it will not increase toll charges until the end of the
concession period in 2038. This will also save the government some RM64
billion in compensation as a result no toll increases between 2016 and
2038.
Such an offer has certainly struck a chord with the motoring public.
Despite the lack of financial details i.e. the offer price and funding
of the purchase, analysts felt that the offer lacked viability for it to
be considered a serious bid.
The current owners - UEM Group Bhd and the EPF - certainly have no plans to part with their prized asset.
Analysts say that PLUS Malaysia Bhd is an attractive takeover target
with its huge cash generating business and steady growth potential.
"PLUS is already a national asset as it is owned by government-linked
companies, 51 per cent by UEM Group and 49 per cent by EPF. It is
pointless to risk privatisation. In terms of being competitive, UEM has
managed PLUS well.
PLUS gives a good return to EPF contributors, so it's not necessary to
privatise it," said David Ang Chin Tat, the Selangor Chairman of
Gerakan.
"The government tries to look after the best interests of the people so
that big assets are sometimes nationalised to protect the public. The
public, also means the people who work for PLUS, not only the highway
users.
"EPF represents 14 million Malaysians (who are contributors). Why should
EPF pull out from the joint venture? I don't see it as being
necessary," Ang said.
Zakie Shariff, a Director of FA Securities, said for a highway that has
reached maturity like PLUS, it made more sense to let the status quo
remain because it was once privatised before being nationalised via EPF
and UEM.
"To have a third party now to buy back from EPF and UEM, I don't see the
rationale. If anyone really wants to reduce the financial burden of the
rakyat, look at the intracity ones, don't just look at PLUS.
"With the high cost of living right now, the offer of no toll hikes and
huge saving is tempting to the public and the government," he said.
Stressing that one needs to think long-term on this matter, he said,
"EPF plus UEM are two government agencies and this partnership, which
saw the nationalisation of PLUS in 2010, has thus far managed PLUS
well."
"Why should this arrangement that is currently benefiting the rakyat be
changed?" asked an economics professor, who spoke on condition of
anonymity, on the Idaman Saga offer.
"No doubt, the public is not happy with the expected toll hike among all the highway concessions and not just PLUS," she said.
"For PLUS, even though it is owned by government agencies, it manages
public amenities and operates like a business entity," she stressed.
But many analysts are also of the opinion that given the maturity of the
toll concessions and the profits that had been enjoyed by the
profitable toll concessionaires, there is a pressing need for the
government to revisit the agreements to reduce the frequency of toll
hikes and the quantum of price increases
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