By Khairie Hisyam
Businessman Halim Saad has not approached UEM Group or the Employees Provident Fund (EPF) on potentially taking over PLUS Malaysia Bhd, Malaysia’s largest toll concessionaire, said a source familiar with the matter, despite presenting a concept paper on the proposed take-over to the Economic Council (EC) last week.
Halim Saad
News reports said today that former UEM-Renong Group chief Halim is making a new bid for PLUS, which he did not manage to take over along with other highway concessionaires in a RM50 billion bid several years ago.
Last week Halim’s representatives, through his investment vehicle Idaman Saga Sdn Bhd, presented a concept paper for a “Rakyat-friendly toll scheme” that would save the government RM64 billion in compensation for the remaining duration of PLUS’ concession period, which would end in 2038.
Seeking the EC’s support and approval for the scheme, Halim’s representatives also said that PLUS users would save an estimated RM82 billion in the same period under the scheme, which would introduce three-year season cards that would effectively offer discounts
to users.
The RM64 billion in savings would come from not having to compensate PLUS in exchange for not raising toll rates as per the current concession agreement, said the concept paper, whereas the RM82 billion savings for PLUS users would come from the discounted toll
rates for users with season cards.
When contacted by KiniBiz, neither PLUS nor its co-owner UEM Group would comment on the matter.
“I cannot comment on that,” said Halim to KiniBiz via telephone.
A source familiar with the matter however told KiniBiz that when the concept paper was presented to the EC, both Halim and representatives of Lembaga Tabung Haji (LTH), who would be his partner in the take-over bid, were present.
Also present were representatives of UEM, EPF and state-investment arm Khazanah Nasional, which is UEM’s parent entity.
‘Why PLUS?’
A source familiar with the matter questioned why Halim is eyeing PLUS if he intends to help the people cope with risings costs.
“Why not go for other highways in the city? PLUS is mostly inter-state,” said the source to KiniBiz.
According to the concept paper sighted by KiniBiz, the “Rakyat-friendly toll scheme” is necessary as existing rolled road tariff structure is a burden for the people who also need to cope with rising living costs.
“A Rakyat-friendly tolled road scheme can be a catalyst for domestic travel and tourism that have an economic multiplier effect,” said the concept paper.
The concept paper, prepared by PwC Capital, claimed that the proposed season cards under the scheme would translate into savings of up to RM1,200 per year for urban commuters travelling up to 50km a day, and double that amount if they travelled up to 100km daily.
Idaman Saga also proposed to make the season cards non-transferable to prevent abuse by urban commuters as well as to prevent households with multiple vehicles from benefitting through the same season card.
However the concept paper did not explain in full what Idaman Saga’s business model for PLUS would be if such a takeover were to happen under the proposed Rakyat-friendly toll scheme and
without toll rate increases until 2038.
Additionally the concept paper also did not put a price on PLUS, nor did it mention how Halim plans to finance his proposed take-over.
In the disclaimer in the concept paper, PwC also stated that it had not sought to establish the reliability of the information and figures on which its projected figures were based. PwC also had not audited the cash flow project for the concept paper.
PLUS operates eight highways in the country, totalling almost 1,000 kilometres stretching the length of the Peninsula from Singapore’s borders to that of Thailand. These include the 772-km North-South Expressway and the Penang Bridge.
A RM23-billion deal saw PLUS taken private by UEM and EPF in a joint venture in 2012, under which the concession terms were restructured to forgo all government compensation until 2015.
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