Report: Source says Works Ministry, MoF have different highway toll proposals; Cabinet wants both to work together

The source reportedly said the Pakatan Harapan government’s ultimate goal is still to abolish highway tolls, but also noted that this has to be done gradually. — Picture by Hari Anggara
The source reportedly said the Pakatan Harapan government’s ultimate goal is still to abolish highway tolls, but also noted that this has to be done gradually. — Picture by Hari Anggara

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KUALA LUMPUR, Oct 3 — The Cabinet yesterday tasked the Finance Ministry and Works Ministry — which had offered differing proposals on tackling highway tolls — to come together and come up with a new idea to solve the matter, a report citing a source said.

Citing an unnamed source with knowledge of the Cabinet discussion, local paper Sin Chew Daily said that the Cabinet discussed the issue yesterday, following the Works Ministry’s proposal of toll reduction and subsequent takeover of highways and the Finance Ministry’s proposal which included the acquisition or takeover of four intracity highways which Gamuda Berhad has substantial stakes in.

“The Cabinet spent a long time discussing the highway issue, but has yet to make a decision on the details, but only agreed in principle to ask the Works Ministry and Finance Ministry to find a proposal based on current economic conditions.

“Both ministries have to come up with a new proposal that will benefit Malaysians,” the source was quoted saying in a report published today.

“The Cabinet has yet to decide whether or not to take over the highways, as both ministries’ proposal papers have different content, therefore it needs to be resolved,” the source said, noting that the Works Ministry’s proposal to reduce toll rates has to be discussed with the Finance Ministry.

According to Sin Chew Daily, the Works Ministry’s report presented its study which focused on reducing highway toll rates without using public funds and restructuring the highway system.

The Works Ministry’s proposal is understood to cover all highways in the country with multiple suggestions aimed at trimming toll rates, including through transfers of share ownerships, reduction of toll concessionaires’ profits and lowering of banks’ loan interest rates, Sin Chew Daily said.

The paper said the Cabinet had previously agreed that the Finance Ministry would have responsibility over intracity highways and had given a six-month timeframe for talks with Gamuda Berhad on the four highways — LDP, Sprint, Kesas and Smart tunnel.

The source reportedly said the Pakatan Harapan government’s ultimate goal is still to abolish highway tolls, but also noted that this has to be done gradually as the government still needs to carry out studies and identify a solution.

In August, Singapore daily The Straits Times had said the Cabinet was set to discuss three choices to bring down the toll rates for Malaysia’s 29 highways

ST had then cited documents that it sighted on three proposals with differing suggestions for how the toll reduction move would be financed and also varying final amounts on the cost.

The first proposal previously announced by Finance Minister Lim Guan Eng involves the use of RM6.2 billion to take over Gamuda’s four highways that would do away with the need to pay RM5.3 billion to compensate the company for not raising toll fares, among other things.

According to ST, the second proposal to be discussed by the Cabinet was by the Works Ministry that is claimed to be able to result in more than RM100 billion in savings over the coming 35 years, where the government would lease the highways until the end of the highway concessionaires’ agreements, which would allow Putrajaya to fix the toll rates.

For the third option, sovereign wealth fund Khazanah Nasional proposed to issue perpetual bonds to borrow money to buy over the highways with no fixed deadline to make repayments, which would enable the biggest cuts to toll rates at 45 per cent, ST had said.

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