Syed Mokhtar-backed firm has highway plan

It is hoped that if privatisation proposals are accepted, they will not involve the government in providing guarantees to the companies

HIGHWAYS, like our backbone, are an essential. So when an unknown private company said last year that it wanted to buy over all tolled highways in the country and offered a sweetener that it would cut toll rates, the proposal raised eyebrows.

Hardly surprising, many were sceptical that the proposal would work.

To cut the story short, the proposal by Asas Serba Sdn Bhd got shot down by most Malaysians, albeit it is still tagged "KIV" by the government.

We now have another proposal to "lessen the government's obligation to highway concessionaires and the public's toll burden". It is from a company backed by elusive tycoon Tan Sri Syed Mokhtar Al-Bukhary, according to a blog that broke the story late last week.

The proposal had been submitted to the Economic Planning Unit (EPU) a few weeks back, the blog noted.

The company's proposal is nearly a carbon copy of Asas Serba's. In essence, it reportedly offered to take over all tolled highways for RM45 billion and cut toll rates by 10 per cent. Like Asas Serba, it is also promising that there will be no toll rate increase.

In comparison, Asas Serba's offer encompasses a RM50 billion price tag for all the highways, a 20 per cent toll discount across the board and no toll rate increase over the concession period.

The latest bid will surely rekindle a national debate on the highway privatisation issue. And, as in the case with Asas Serba, a major point of contention will be the wisdom of letting a single company control the massive business and how on earth is the potential operator going to pay for all the concessions.

To many, it is not a good idea to create a monopoly. Monopoly leads to abuse of dominant positions and anti-competition. Plus, it will send the wrong signals to foreign investors and is not in sync with the reforms undertaken by the government to transform the economy.

But, then again, it is not fair to prematurely rule out these proposals to privatise our highways until we know the details. This means knowing about the business and financing models, among other things.

The details may be known only by the EPU's top brass (or some people at the Ministry of Finance). Perhaps, the company's management will hold a media conference soon to lay bare what the public will want to know about its bid.

For now, we can only hope that if these privatisation proposals are accepted, they will, firstly, not involve the government at all, including in providing any form of guarantees to the companies; and, two, not sacrifice the good services being provided by the existing concessionaires.

By Zuraimi Abdullah

Business Times