Plus and the other toll operators can now breathe easy.With the on-going recessionary pressures weighing heavily on the shoulders of the government, the likelihood of tolled road operations being nationalised by seems remote. Government will need the money more to resuscitate the economy.
Nationalisation of toll operators would not only be costly but more importantly would not have any significant impact on the economy, the business environment as well as the capital markets.
Calls for the nationalisation of toll highways came about early this year particularly of the North South Expressway managed by PLUS Expressways Bhd.
DBS Vickers Research recently stated that the government was most unlikely to invoke an expropriation clause in the toll concession agreement to nationalise PLUS Expressways as it could involve shelling out a total of RM30 billion for the exercise.
Another option is the privatisation route — assuming the target price is RM3.80 per share and with PLUS Expressways’ debt less cash, the cost will work out to be RM15.7 billion. This will definitely over-strained government coffers.
The privatisation of Lingkaran Trans Kota Holdings Bhd (Litrak) — the concession holder of Damansara-Puchong Highway (LDP) — by the government is more likely as it would cost approximately RM1.3 billion to take the company private.
An analyst with a local stockbroking firm who spoke on condition of anonymity said if the government decides to nationalise toll highways, one big issue would be the recovery of its investment.
“The government would not only be saddled with the issue of toll rates but also how it will maintain the highways apart from recovering its investments,” he said.
In terms of financing, he said, the government was already overstretched in funding the nationalisation of the country’s water assets.
The nationalisation of toll highways that would require massive funding would increase the government’s budget deficit and contrary to its intention to reduce the deficit.
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