The RM50 billion question on the toll highway

I picked this up this morning from Bloomberg.

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Malaysia Group May Sell Bonds for $15.6 Billion Highways Bid

A group of Malaysian businessmen said they would sell bonds to help finance a potential 50 billion- ringgit ($15.6 billion) bid to take over all the country’s toll- road operators.
The consortium, Asas Serba Sdn., said it’s awaiting government approval before making offers for 23 highway companies, including Kuala Lumpur-listed PLUS Expressways Bhd. and Lingkaran Trans Kota Holdings Bhd. Consent is needed because the government awards highway concessions.

Asas Serba is a privately owned special purpose vehicle with four shareholders, led by Chairman Syed Amin Aljeffri, president of the Kuala Lumpur Malay Chamber of Commerce. The others are Syed Budriz Putra, Wan Kamaruddin Ali and Ibrahim Bidin.

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Apparently this is not new. I guess I missed this as I am not a Utusan Malaysia regular.


Tol: Berikan kami peluang


''Teras utama cadangan pengambilan alih konsesi tol ini adalah mengurangkan beban kerajaan dan rakyat,'' dakwa beliau.

Ketua Pegawai Eksekutif Asas Serba, Ibrahim Bidin berkata, dalam cadangan tersebut, syarikat telah mengemukakan penurunan kadar tol sebanyak 20 peratus daripada kadar semasa sehingga kontrak konsesi tamat pada 2038.

Cadangan yang dikemukakan itu didakwa mampu memberi penjimatan subsidi kepada kerajaan sebanyak RM114 bilion.

Ketika ditanya tidakkah cadangan itu menyebabkan keuntungan yang diperoleh mengambil masa lebih lama, Syed Amin berkata, keuntungan boleh diperoleh dengan pertumbuhan trafik.

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I suppose the deal sounds reasonable until I cross reference with one of my previous post on the Alternative 2010 Budget by the DAP Economic Bureau chaps.

BA memperuntukkan RM25,000,000,000 untuk tujuan mengambil alih semua lebuhraya bertol termasuk lingkaran lebuhraya PLUS

That is half of the price proposed by Asas Serba. Being shrewd business people, surely the deal makers need to make more than RM50 billion from toll payers to generate healthy return to run the toll highway, pay dividends and income tax and leaves enough to have a good life for themselves and their loved ones.

If there is an open tender to this, should the payer, i.e rakyat jelata, be entitled to hear what both side have to say? Should we be entitle to know how a professional accountant propose to run a highway in a more efficient and effective manner that would improve the rakyat's position?

It would be fun to have a national referendum to this little nugget.

Mr. Syed Amin has a formidable CV in accountancy and corporate practice so I would gather that there would be some interesting story behind the numbers and since this is of national interest hence we tax payers and toll bearers must be kept informed and our opinion respected.

If I put my Bart Simpson hat on, I would have this to say:

1) given the drop in crude oil prices, retraction of GST and higher traffic fines and splurging here there and everywhere up to Hulu Selangor, is the BN administration facing cash crunch?

2) remember Leeds United circa 2003-2004 who borrowed so much and gambled on their future continuous on-field successes to generate sufficient revenue to pay off the huge debts? In the end, everything went, Alan Smith and the gold fish included.

The toll highway is one such future stream of guaranteed income. One can build up a business and have 2 choices: 1) continue to operate it and get its routine income, pain and pleasure 2) sell it to someone at a price equivalent to a number of years of future income hence having an immediate bundle of cash immediately for whatever purpose he or she so desire.....

3) with the sudden injection of RM50 billion should Najib administration agree to the bid, how does his administration propose to spend the funds?

Which ever way you look at it, we toll payers are at the bottom of the food chain. What options do we have?

1) stick with present, pay toll and compensation for profit to the rent seekers/leeches who are guaranteed come sunshine, rain, snow or alien invasion.

2) We buy RM40 billion worth of bonds (80% of the RM50 billion outlay), continue to pay toll some more to the people we lend money to gain rights to collect toll from us, and get a discount from them in the form of bond dividends. Perhaps we need to understand what does what is the definition of "pertumbuhan trafik" means in their books and if there is any caveat to that.

They also mentioned about restructuring the routes to save cost in the Utusan report. Sounds interesting on paper but without further elaboration, we really can't tell if it really works.

tidak menolak kemungkinan lanjutan konsesi boleh dijadikan pilihan, sekiranya syarikat itu berupaya mengekalkan kadar tol yang rendah

- perhaps this tell us something?

3) or what DAP suggested - cut our losses, unfair contract is still a valid contract, pay the once off alimony and start a new leaf or let the Unfair Public Commission as proposed in the budget take its course PROVIDED we Malaysians vote them in (or in this era of copy and paste....)

In this way, the voters can hold the PR side against this promise

4 comments:

  1. This group doesn't have a track record. All they have is a plan. That would not deserve even a second of consideration. But by Malaysian standard, it is acceptable, I guess. Mana ada standard? If the government agrees to their proposal, it will not be based on merits.
    Looks like a fishy deal.

    ReplyDelete
  2. spot on Azli, you are right about the track record.

    Just look at the price difference...and of course, what experience Perimekar had with submarines?

    it is so easy to see through all these Malaysian style "special purpose vehicles" nowadays

    ReplyDelete
  3. "Formmidable CV" quip drew some reactions....n perhaps interesting interpretation.....

    http://www.malaysia-today.net/index.php?option=com_content&view=article&id=31644:the-rm50-billion-question-on-the-toll-highway&catid=16:from-around-the-blogs&Itemid=100132


    written by Angela Ooi, May 05, 2010 17:03:28

    Another creative way to get $$$ upfront for the frequent robber-baron BN leaders. I repeat my mantra...Nothing BN does is for the people - squeese and screw them and then some more.
    Anything and everything being done is to cream more $$$ for themselves.
    +16 ...
    written by Eskay345, May 05, 2010 15:32:06

    So now comes the master-plan from the politically-connected white-knights "to skin the rakyat once more" to monopolise the country's tolled-highways.

    +17 ...
    written by hellosunshine, May 05, 2010 13:55:14

    Any way you cut it, the end losers will be the rakyat. Are we so masochistic that we love to be sodomized, raped and ravaged by these umnoputras and their cronies day after day after day??? When are we going to shout out loud to stop these daylight robberies? Enough already!!!!
    +21 ...
    written by Nunudada, May 05, 2010 13:29:20

    You mean he has a formidable CV in shifting numbers? He is an UMNO crony and everyone knows it.
    +18 ...
    written by NSTPravda, May 05, 2010 13:14:51

    hence we tax payers and toll bearers must be kept informed and our opinion respected ???!!! and pigs will fly and pink elephants will tip toe down the highway, and TBH, Altantuya, Kugan, Aminurasyd, etc will suddenly find justice, UMNO will eschew "money politics", PIG will resign from PDRM, ISA will be abolished, blah, blah, ....
    Mimpi dream on lah! All we get now is al-UMNOdollarlah!

    +16 ...
    written by cheekhiaw, May 05, 2010 12:56:44

    You don't need a formidable CV to know that one company owning all the toll roads is monopoly, and that can only be the attempt by the same bunch of thieves running the country to lock in the money spinning machine before they lose control of the country.

    Any idiot can operate a toll road monopoly profitably.

    Buy a company that any idiot can run for someday one will - Warren Buffet.

    xxx

    ReplyDelete
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