DAP shows how North South Expressway (PLUS Highway) can be toll-free by 2016

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.