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KUALA LUMPUR: The government is mulling the idea of sharing part of the profit from the eventual sale of land along newly built expressways with the concessionaires, said Works Minister Datuk Shaziman Abu Mansor.
Such a move would help to lighten the concessionaires’ cost burden and the intensity of toll hikes, the minister said.
The value of land adjacent to highways tended to appreciate as the connectivity improved, Shaziman said.
“The government will identify the land along the highway which has the potential to appreciate and we will factor this into the cost of building the highway and this will indirectly lower toll rates,” he added.
According to Shaziman, the government would then acquire the land and the profit from the eventual sale of this land could be ploughed back to the concessionaires.
“This would involve the government and the highway concessionaires. There is a possibility there for the government and highway concessionaires to work together,” he added.
Shaziman said current highway concessionaires, for instance PLUS, may also get these benefits “if there is still land owned by the government near these highways”.
The minister was speaking to the media at the PLUS International Expressway Conference & Exhibition 2010 yesterday (April 6).
Shaziman said he would make the proposal to the cabinet for its consideration and for the deliberation of the finance ministry.
Also, the minister pointed out that the government was considering longer loan repayment periods for companies building highways in the future. This is to minimise the impact of future toll rate hikes.
“Perhaps we could extend it to 100 years, or possibly 50 years. This is because a highway’s lifespan is much longer than the repayment period of 30 years today. If there is such a financing scheme, the highway companies will not have to charge high rates,” he said.
“If a highway is properly maintained, it can last for longer than the 30-year repayment period. A highway is unlike other public facilities, such as piped water — because water pipes can only last for perhaps 15 to 20 years.”
Commenting on the management of the Middle Ring Road 2 (MRR2), Shaziman said Dewan Bandaraya Kuala Lumpur (DBKL) had agreed to hand over the 40km highway to the Public Works Department (PWD).
The MRR2 is currently under two jurisdictions — DBKL and PWD — as it is in both Kuala Lumpur and Selangor.
Shaziman noted that it would be difficult for the highway, in which the government has allocated RM10 million for its safety upgrade, to be more efficiently maintained if it were to be under two jurisdictions.
The cracks along the MRR2 had drawn criticism on its quality and safety.
This article appeared in The Edge Financial Daily, April 7, 2010.
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