KenaSaman.com

SEREMBAN: The country’s established pension funds are being encouraged to buy stakes in profitable toll concession companies to improve returns to the people.

Works Minister Datuk Shaziman Abu Mansor said the Government was working out a mechanism to see how this could be done.

Citing the acquisition of PLUS Expressways by the EPF and the Khazanah-owned UEM Group Bhd, Shaziman said that such an investment would benefit all parties – the concessionaires, the buyers, the Government and the people.

“We are already looking at this and you can expect some activity soon,” he told The Star.

Apart from the EPF, the established pension funds are the Armed Forces Superannuation Fund (LTAT) and the Pensions Trust Fund.

Shaziman said these cash-rich pension funds could invest part of their money in profitable toll highways and provide good returns to their members.

“The concessionaires could use the capital injection to diversify. They can have more sources of income rather than rely solely on toll collection,” he added.

Shaziman said motorists also stood to benefit if this happened as toll increases would be nominal and only allowed after several years.

“We will come in and restructure the concession agreement. This way, the Government will be spared having to pay compensation to the concessionaire for not allowing an increase in rates,” he said, adding that the concession period could be extended.

Shaziman said the Government saved billions of ringgit in compensation when the EPF acquired PLUS Expressways.

The EPF and UEM Group had in November waived their right to some RM6.5bil in compensation from the Government for not allowing toll increases in return for extensions to the concession periods for the Penang Bridge and two other highways.

(The Government owed PLUS billions in compensation due to the decision to suspend toll hikes stipulated in the original concession agreement until 2015.)

Following the acquisition, toll increases for the North-South Expressway would also be lowered from 10% every three years to 5% at the same intervals.

The toll at the Penang Bridge, which used to be increased by 10% every five years, will not be raised.

In return, the concession period for the Penang Bridge, the NSE Central Link and the Butterworth-Kulim Expressway will be extended to Dec 31, 2038, from 2021, 2030 and 2026 respectively.

According to the Malaysian Highway Authority, there are 35 highways in operation.

Shaziman declined to say if any of the pension funds was already negotiating with any highway concessionaire.

He stressed that the pension funds would only be allowed to invest in tolled highways which had been registering profits and had a good record.

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http://thestar.com.my/news/story.asp?fi ... sec=nation