KUALA LUMPUR – The government will not be spending a single sen for the restructuring of concessions for four major highways in the Klang Valley, either through direct funding or government guarantee, said Works Minister Datuk Seri Fadillah Yusof.
The senior minister said this is the commitment given by the government in ensuring no public funds are used for the takeover of the highways by private company Amanat Lebuhraya Rakyat Bhd (ALR).
Speaking to The Vibes, Fadillah said the entire funding for the restructuring will be fully borne by ALR by way of Islamic bonds or sukuk.
“In ALR’s proposal to us, they said they are going to raise their finances through sukuk.
“There will be no financial assistance from the government, either through financing or guarantee. The government is not involved at all.”
Fadillah was responding to some of the concerns raised by the public over the proposed concessions takeover for Shah Alam Expressway (Kesas), Western Kuala Lumpur Traffic Dispersal System (Sprint Highway), Damansara-Puchong Expressway (LDP), and Stormwater Management and Road Tunnel (Smart).
In a statement yesterday, Prime Minister Datuk Seri Ismail Sabri Yaakob had announced that the concessions restructuring will see the toll rates for the four highways remain unchanged until the end of their concessions.
Fadillah had also said yesterday that ALR has offered to buy 100% of the shares in all four concessionaires, and to help the non-profit firm achieve the objectives of its establishment, the government has agreed to extend the concession periods.
ALR has offered a total of RM5.48 billion to take over the concessions of the four highways, with RM2.119 billion offered to LDP, RM1.24 billion for Kesas, RM1.808 billion for Sprint Highway, and RM313 million for Smart.
A three-month old company with no history
Based on documents obtained from the Companies Commission of Malaysia (SSM), ALR was only incorporated on December 13 last year, with its nature of business listed as being activities of holding companies.
Seeing that it was set up months ago, there are no financial reports or records of loans filed by ALR.
Based on the SSM documents, the firm has one secretary and five other individuals listed as both directors and shareholders, each holding 1,000 shares, including its chairman Tan Sri Azlan Mohd Zainol.
Azlan, who is a prominent figure in the banking industry, currently holds several top positions in other companies, including being the chairman for Eco World International Bhd, MBSB Bank Bhd, Malaysian Resources Corporate Bhd and Yayasan Astro Kasih.
Another director in ALR is Datuk Nirmala Menon, who is currently also serving as the independent director of Bank Negara Malaysia and independent non-executive director of Sime Darby Bhd and Aviva Singlife Singapore.
The Vibes also discovered that Nirmala used to chair an offshore company FWD Life Insurance Company (Bermuda) Limited, from March 2012 to February 2013.
Other than Azlan and Nirmala, the other ALR directors are Datuk Idrose Mohamed (who had previously helmed PLUS Expressway, Pos Malaysia and Prasarana Malaysia), Real Estate and Housing Developers’ Association (Rehda) president Datuk Soam Heng Choon, and former Malaysian Communications and Multimedia Commission chief Datuk Mohamed Sharil Tarmizi (who is also currently a director in Digital Nasional Berhad).
The more traffic, the shorter the concession
On its website, ALR said all surplus or profits generated throughout its ownership of the highways will be channelled back to finance its earlier debts, which will then enable the concessions to be shortened.
It affirmed that after takeover, toll rates for the affected highways will be maintained at the current rate until the end of the concession extension.
The company also confirmed that the acquiring of the four high concessionaires will be done by raising funds through “sustainability sukuk or sustainable responsible investment sukuk”.
“The four concession companies will continue to operate and perform maintenance of the highways with the existing management team and staff intact, upon the completion of our proposed acquisition,” it said.
According to ALR, since the company is not-for-profit, all its shareholders will not be allowed to receive dividends.
“Therefore, all and any profits generated through the operation of these highway concessions must be channelled purely for the servicing and early redemption of ALR’s financial debts.
“Under our ALR structure, the more traffic there is on our highways, the shorter the concession will be.”
Meanwhile, Pakatan Harapan is urging the government to provide a full explanation to Parliament on the details of ALR, and clarity pertaining to the company’s financial obligations and expenditure transparency. – The Vibes, April 5, 2022
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