Finance Minister: Highway offer made after due diligence by experts

Finance Minister Lim Guan Eng has hit out at detractors of his highway concession takeover plan, saying it was made after due diligence and will save users up to RM180 million annually.

This came after he issued a statement on Sunday confirming that the federal government had made a conditional offer subject to cabinet approval to acquire four highways at a total cost of RM6.2 billion.

"Questions have been raised as to why the government should acquire the highway concessions, which will expire between nine to 23 years. Clearly, the immediate rationale will be that highway users will pay a reduced congestion charge that can save them RM180 million annually," he said in a statement today.

"The concession period will not be lengthened but will expire in accordance with the existing concession agreements," he reminded critics on the move.

"Upon expiry, the congestion charges will be further reduced significantly to cover only the operating and maintenance costs, without any profit element."

Lim also pointed out that the conditional offers, when approved by the shareholders and creditors of the four highway concessionaires, were still subject to cabinet approval.

 "This was clearly stated in my (earlier) statement after the in-principle approval was first granted by the cabinet on Feb 27 as well as Prime Minister Tun Dr Mahathir approving the conditional offer on June 20.

"Let me reiterate that the conditional offer is made after due diligence by professional banking consultant in line with fulfilling the commitment by the Pakatan Harapan government in its electoral manifesto to take over highway concessions and gradually reduce toll rates to ease the burden on the people," he said.

According to him, the benefits of the acquisition included at least RM5.3 billion in compensation payments being saved by the government.

The proposed acquisition cost of RM6.2 billion will be funded by a bond issuance that is fully financed and paid for from the collection of congestion charges, he added.

"This compares to having to pay RM18 billion in compensation for the highways to not collect any toll charges. Due to legacy issues from the previous government leading to financial constraints, the federal government cannot afford to fork out RM18 billion.

"By issuing the RM6.2 billion bond at no cost to the federal government, there is a win-win solution because of the savings of at least RM5.3 billion in compensation for the four highways for freezing toll hikes," Lim said.