Gamuda accepts govt offer to take over its 4 highways06/28/2019
Gamuda’s board of directors has voted to accept the government’s offer to acquire four highway concession companies linked to the group. Gamuda owns a 44% stake in Litrak (the operator of LDP), a 52% stake in Sprint, a 70% stake in Kesas and a 50% stake in Smart (Tunnel).
“The board of Gamuda will make the appropriate announcements in due course after the going through the relevant due process with its respective associated companies and joint venture company,” the company said, in a filing with Bursa Malaysia yesterday.
On June 21, the government announced a RM6.2 billion offer to acquire the four toll concessionaires that operate the LDP, Sprint, Kesas and Smart Tunnel highways.
The plan was first mentioned in February, when the prime minister’s office noted that Pakatan Harapan has promised in its election manifesto to take steps to acquire highway concessions and abolish toll collection in stages, in accordance to the terms of the concession agreement. The move is to alleviate the high cost of living for city commuters.
According to finance minister Lim Guan Eng, the move will save motorists as much as RM180 million per annum. One will still need to pay to use the highways under a congestion charge system that will be implemented on Jan 1 next year.
“The congestion charge model follows a variable pricing structure which depends on the time of the day. In principle, the government will give discounts of up to 30% for hours outside of peak periods and free travel during off-peak periods. In addition, the maximum congestion charge will be capped at the current toll rate in order to not cause further burden to the commuters,” Lim said.
He added that the move will also save government coffers RM5.3 billion in compensation payments to the toll concessionaires in order to freeze toll rate hikes until the end of the respective concession periods. The collection of congestion charge will be sufficient to service the debt, as well as to finance the operation and maintenance costs of the highways without requiring additional budget allocation, the minister explained.
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