We have proposed that the Government should buy back all shares of PLUS Expressways Bhd which it does not already own and take over its existing asset backed liabilities for the approximate amount of RM15 billion. This amount and more, will be recovered from motorists using the North-South Highway by maintaining the existing toll rates for a period of six years. Should PLUS be acquired this year, by 2016, toll will no longer be required to be collected on PLUS owned highways.
We have also proposed that highways such as the Lebuhraya Damansara-Puchong (LDP) with reasonable expropriation clauses be acquired from the concessionaires as per the terms in the concession agreements. It is estimated that the cost of buying back LDP will only cost approximately RM1.4 billion, including liabilities to be assumed by the government.
Critics have panned the above proposals based on the following reasons.
- The funds needed for the acquisition of highways can be better utilised for other projects.
- The acquisition of these highways which are largely in Peninsula Malaysia will anger East Malaysians who do not benefit from the funds used for buy-back.
Similarly for the LDP, assuming that toll rates are capped at RM1.60 and no traffic increase, it'll cost an estimated RM1.54 billion in compensation alone between now and the end of the concession in 2029. For both highways, it is clearly more economical for the Government to buy back these highways, allowing for more funds to be used for other projects, including those in East Malaysia.
- There is no economic impact from money spent to buy back the highways, compared to spending them on “stimulus” projects
- The Government will have problems raising the funds to execute the highway buy backs.
- The buy backs will result in a higher budget deficit
- The Government will have to bear the burden of maintenance, especially after the highways become toll-free
Therefore, the DAP would like to reiterate our position to the Works and Finance Ministries, as well as the Economic Planning Unit (EPU) to buy back PLUS Expressways via the stock market, as well as other highways by exercising the expropriation clauses within these agreements. The above proposals are the best options to ensure that Government funding is most effectively utilised, and the interest of the people are best protected.