Malaysia to cut highway toll rates, including at Second Link

PETALING JAYA • Malaysia's biggest highway operator Plus Expressways will lower tolls by 18 per cent on its highways from as early as Feb 1, including at the Tuas-Johor Second Link.

These highways will also not be increasing their tolls for the next 38 years as part of a deal with the government to extend the concession period for the operating company, the Prime Minister's Office (PMO) said in a statement yesterday.

"The Cabinet decided on Jan 15 to lower tolls by 18 per cent for all private vehicle users on all Plus highways as early as Feb 1. The implementation of the lowering of the tolls will be based on the approval of Plus shareholders," it said.

The move is likely to be popular in Malaysia as Plus runs eight highways, including Malaysia's longest toll road that runs from southern Johor in the south to the Thai border in the north, the North-South Expressway (NSE).

The government move forms part of an election promise by the 20-month-old Pakatan Harapan (PH) administration to cut highway tolls until they can be abolished completely, said the PMO statement.

PH is under pressure to tackle the high cost of living and for its failure to fulfil some of its major election promises, including lowering fees on toll highways.

Malaysian sovereign fund Khazanah Nasional has a 51 per cent stake in Plus through its UEM Group subsidiary. The remaining 49 per cent is held by the state pension fund Employees Provident Fund (EPF).

Apart from the Second Link and NSE, Plus also operates two highways near Kuala Lumpur - the New Klang Valley Expressway and the Expressway Central Link.

It also operates the Penang Bridge, the Butterworth-Kulim Expressway, the East Coast Expressway Phase Two and the Seremban-Port Dickson Highway.

The PMO statement said: "The concession on all Plus highways will be extended by 20 years from 2038 to 2058. This is to ensure that Plus can afford to maintain the highway operation without depending on the government.

"Even though the earlier concession agreement provides for toll hikes, the latest Cabinet decision ensures there will be no more toll hikes until the concession ends after 38 years.

"No compensation will be made to Plus for lowering of the tolls."

The statement added that the government would save RM42 billion (S$14 billion) from not paying compensation to Plus to maintain the toll rates.

That money will now be used for other initiatives for the benefit of the people, it said.

The government said this week that Khazanah and EPF will remain the main shareholders of Plus, "based on a one-year study and a wholesome consideration by the ministries of Works, Finance and Economic Affairs". This put paid to the offers by five parties to privatise the Plus highways.

"We have studied all the bids made by the private sector, and also the bid by Khazanah Nasional," said Prime Minister Mahathir Mohamad.

"We decided that the best way is not to sell Plus to anybody, but to keep it with Khazanah Nasional and EPF."

THE STAR/ASIA NEWS NETWORK

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A version of this article appeared in the print edition of The Straits Times on January 18, 2020, with the headline Malaysia to cut highway toll rates, including at Second Link. Subscribe