Aliran is concerned about the possible sale of PLUS Malaysia Bhd, the largest highway operator in the country, to private interests.
At present, the government, through Khazanah, owns 51% of the firm, while the Employees Provident Fund (EPF) owns 49%. The highway tolls collected thus provides the government and workers with a substantial return.
So the highways should not be privatised as private companies will want to take over these assets at the lowest price while extracting as much profit from tolls as possible.
Khazanah is correct to be against the sale of its stake in PLUS. In early October the Khazanah managing director commented about the takeover offers: “What they are doing is they want to take money from us by paying us basically a substandard price and using that difference in value to offer a discount…. If you were to allow a private party to take over PLUS, and that party suddenly made a lot of profit, people will be very unhappy.”
He added that Khazanah must ensure that strategic assets such as PLUS are not sold to parties whose only interest is in making profits, without considering the needs of the people. “If PLUS is making profits, it goes back to the government through Khazanah, or to Malaysians via the EPF.”
Even with an improved private offer from one of the private firms at the end of October 2019, Khazanah said its position not to sell remained.
PLUS, therefore, must remain in public hands.
The promise to lower toll rates in the Pakatan Harapan manifesto for the 2018 general election may not have been well thought through. That promise should not be used as an excuse to sell PLUS.
The government should instead use the existing highway tolls as leverage or congestion charge to nudge more people into public transport, thus curbing greenhouse gas emissions in this era of climate change.
Furthermore, the government should use the profits and dividends from PLUS to finance, subsidise and upgrade public transport (instead of allowing these profits and dividends to end up in private hands). Improved public transport would ease the burden faced by commuters, who have to incur motor vehicle loan repayments, insurance costs, petrol costs, tolls, road tax and parking fees. The substantial savings for commuters would enhance their quality of life.
The profits and dividends generated from PLUS tolls will ensure steady returns for the government and for workers through higher returns on their EPF savings. (In this connection, the government should review PLUS’ high maintenance expenditure to see if it is reasonable.)
Aliran therefore urges cabinet and Parliament to block the sale of PLUS to protect the public interest.Aliran executive committee
8 January 2020