Malaysia's highway operator Plus Expressways to cut toll rates by 18%, including at Tuas Second Link

The highways also won't be hiking their tolls for the next 38 years as part of a deal with the government to extend the concession period for the operating companies.
PHOTO: The Star/Asia News Network

PETALING JAYA - Malaysia's biggest highway operator Plus Expressways will lower tolls by 18 per cent at its highways from as early as Feb 1, including at the Tuas-Johor Second Link.

These highways also won't be hiking their tolls for the next 38 years as part of a deal with the government to extend the concession period for the operating companies, the Prime Minister's Office (PMO) said in a statement on Friday (Jan 17).

"The Cabinet decided on Jan 15 to lower tolls by 18 per cent for all private vehicle users on all Plus highways, as early as Feb 1. The implementation of the lowering of the tolls will be based on the approval of Plus shareholders," the statement said.

The move is likely to be popular in Malaysia as Plus runs eight highways, including Malaysia's longest tolled road that runs from southern Johor in the south to the Thai border in the north, called the North-South Expressway (NSE).

The government move forms part of an election promise by the 20-month old Pakatan Harapan (PH) administration to cut highway tolls, until they could be completely abolished, a PMO statement said.

PH is under pressure to tackle the high cost of living and for its failure to fulfil some of its major election promises, including lowering fees at tolled highways.

Malaysian sovereign fund Khazanah Nasional has a 51 per cent stake in Plus through its UEM Group subsidiary. The remaining 49 per cent is held by the state pension fund Employees Provident Fund (EPF).

Apart from the Second Link and NSE, Plus also operates two highways near capital Kuala Lumpur called the New Klang Valley Express and the Expressway Central Link.

It also operates the Penang Bridge, the Butterworth-Kulim Expressway, the East Coast Highway Phase Two and the Port-Dickson-Seremban Highway.

The PMO statement said: "The concession on all Plus highway will be extended by 20 years from 2038 to 2058. This is to ensure that Plus can afford to maintain the highway operation without depending on the government.

"Even though the earlier concession agreement provides for toll hikes, the latest Cabinet decision ensures there will be no more toll hikes until the concession ends after 38 years. No compensation will be made to Plus for lowering of the tolls."

The statement added that the government would save RM42 billion (S$14 billion) from not paying compensation to Plus to maintain the toll rates.

That money will now be used for other initiatives for the benefit of the people.

The government this week said that Khazanah and EPF will remain the main shareholders of Plus, "based on a one-year study and a wholesome consideration by the Ministries of Works, Finance and Economic Affairs". This put paid to the offers by five parties to privatise the Plus highways.

On Thursday, Prime Minister Mahathir Mohamad said the Cabinet has decided not to sell Plus despite bids from private sectors and by Khazanah itself.

"We have studied all the bids made by the private sector, and also the bid by Khazanah Nasional. We decided that the best way is not to sell Plus to anybody, but to keep it with Khazanah Nasional and EPF," he said.

With the lowering of the highway toll a typical fee on PLUS will be lowered from 13.6 sen per km to 11.15 sen per km, which is lower than the rate in 1999 when it was 11.24 sen per km.

Once implemented, a trip on the NSE from the Jalan Duta toll station in Kuala Lumpur to Alor Setar in Kedah would cost RM45.50 as compared with RM55.50 currently.