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Thread: Public Transport, EDL Bailout: Putrajaya to take over EDL as BN mounts defence of Johor

   
   
       
  1. #1
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    Public Transport, EDL Bailout: Putrajaya to take over EDL as BN mounts defence of Johor

    This only happened because BN fears losing Johor. Otherwise the Rakyat can go fly kites.



    Putrajaya to take over EDL, as BN mounts defence of Johor



    August 30, 2012
    KUALA LUMPUR, Aug 30 — The federal government will buy out the controversial Eastern Dispersal Link (EDL) in Johor Baru from concession holder Malaysian Resources Corporation Berhad (MRCB), in what appears to be a move to prevent the proposed toll for the Causeway that would have made it six times as expensive for roundtrips to Singapore and becoming fodder for Pakatan Rakyat (PR) in the Umno bastion.

    Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said today that details of the takeover will only be discussed later after talks between both parties.

    MRCB had proposed a RM9.10 toll in each direction for passenger vehicles using its RM1 billion EDL highway from the Causeway to the immigration post.

    However, the Umno-linked company is using an open toll system that charges the full fare at the new Custom, Immigration and Quarantine (CIQ) checkpoint regardless of where motorists exit or enter the highway — the latest facility for the ambitious Iskandar zone that celebrates its five-year anniversary this weekend.

    The rest of the 8.1km stretch leading to the Pandan interchange of the North-South Highway will be free to local motorists.

    Local business leaders had express concerns that, with the new CIQ already taking Singaporean tourists away from downturn Johor Baru, the EDL will see them skip the more inland Tebrau area as well.

    Taxi drivers also called for an exemption as it would otherwise be unfeasible to ferry passengers across the Causeway.

    The EDL opened on April 1 without any toll collection after being delayed from a scheduled first quarter launch.

    In a visit to Johor in March, Prime Minister Datuk Seri Najib Razak had promised a solution to the controversy.

    Over 50,000 vehicles cross the bridge daily, mostly Malaysians living in and around the state capital who commute to the island republic to work.

    Johor Baru’s economy is also heavily reliant on Singaporeans who cross the Straits of Johor to enjoy cheaper prices there.

    Putrajaya set up the Iskandar zone five years ago to turn Johor Baru and its surrounding region into an economic growth area catering to the spillover from Singapore.

    Cars and lorries exiting Singapore and heading into Johor now pay RM2.90 and RM5.50 respectively to use the bridge while motorcycles, which make up more than half of traffic across the Causeway, are exempt from the toll.

    Singapore’s Straits Times reported in 2008 that rates will be raised every three years of the 30-year concession and will peak at RM14.60 for passenger vehicles and RM29.20 for lorries.

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    This is a bailout of MRCB.

    EDL takeover proves Pakatan policies spot on, says Rafizi

    August 31, 2012



    KUALA LUMPUR, Aug 31 — PKR’s strategy chief Rafizi Ramli welcomed today Putrajaya’s decision to buy out the controversial Eastern Dispersal Link (EDL) in Johor Baru from highway concessionaire Malaysian Resources Corporation Berhad (MRCB), saying the move proved the Pakatan Rakyat (PR) opposition pact’s proposed policies were in the public’s best interests.


    But he cautioned that the government’s decision may be an attempt by the ruling coalition to camouflage the sale of national assets to its “cronies”, pointing out the lack of transparency over highway concession negotiations.


    In Malaysia, such negotiations are covered by the Official Secrets Act, which has been widely criticised as a tool leading to financial abuses of national public funds.
    “Datuk Seri Najib Razak’s move directing the takeover of the EDL actually confirms that the fundamental economic principles in the Buku Jingga can be carried out and are more beneficial to the people,” Rafizi (picture) said in a statement today, referring to the prime minister who also heads the Finance Ministry.


    He pointed out that the move to prevent an expensive toll fare hike appeared to be lifted from among the opposition pact’s 10 economic policy proposals as laid down in its Buku Jingga, or Orange Book, that it planned to carry out should it win power at the next national polls due soon.


    “However, I am concerned that this takeover could be a trick so that public money can be smuggled out to companies that are close to Umno/Barisan Nasional, especially when the concession holder is MRCB which is close to Umno,” Rafizi said.
    The construction and property development giant has been linked to Umno leaders.
    He called for a parliamentary select committee (PSC) to be set up to look into the government purchase and ensure fairplay.


    “A PSC must be formed in the next Dewan (Rakyat) sitting to study, check and ensure all negotiations that involve the purchase of giant assets from interested companies are conducted fairly and without any elements of corruption,” said the former CEO of Selangor’s Economic Adviser’s Office.


    He said PKR will raise the issue when Parliament reconvenes next month.


    Yesterday, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said details of the EDL takeover will only be discussed later after talks between both parties.


    MRCB had proposed a RM9.10 toll in each direction for passenger vehicles using its RM1 billion EDL highway from the Causeway to the immigration post.


    However, the Umno-linked company is using an open toll system that charges the full fare at the new Customs, Immigration and Quarantine (CIQ) checkpoint regardless of where motorists exit or enter the highway — the latest facility for the ambitious Iskandar zone that celebrates its fifth anniversary this weekend.


    The rest of the 8.1km stretch leading to the Pandan interchange of the North-South Expressway will be free to motorists.


    Local business leaders had express concerns that with the new CIQ already taking Singapore tourists away from downturn Johor Baru, the EDL will see them skip the more inland Tebrau area as well.


    Taxi drivers also called for an exemption as it would otherwise be unfeasible to ferry passengers across the Causeway.


    The EDL opened on April 1 without any toll collection after being delayed from a scheduled first-quarter launch.


    In a visit to Johor in March, Prime Minister Najib had promised a solution to the controversy.


    Over 50,000 vehicles cross the bridge daily, mostly Malaysians living in and around the state capital who commute to the island republic to work.


    Johor Baru’s economy is also heavily reliant on Singaporeans who cross the Straits of Johor to enjoy cheaper prices there.


    Putrajaya set up the Iskandar zone five years ago to turn Johor Baru and its surrounding region into an economic growth area catering to the spillover from Singapore.


    Cars and lorries exiting Singapore and heading into Johor now pay RM2.90 and RM5.50 respectively to use the bridge while motorcycles, which make up more than half of traffic across the Causeway, are exempt from the toll.


    Singapore’s Straits Times reported in 2008 that rates will be raised every three years of the 30-year concession and will peak at RM14.60 for passenger vehicles and RM29.20 for lorries.



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    Economists start talking nonsense.

    EDL takeover could weaken future toll projects, says economist

    By Lee Wei Lian
    September 01, 2012
    Highway concessionaires could no longer count on unyielding support for toll collections, said Yeah. — File pic



    KUALA LUMPUR, Sept 1 ― A government takeover of the Eastern Dispersal Link (EDL) could undermine future toll projects given as concessionaires must be mindful that the government could reverse support due to public pressure, said RAM Ratings chief economist Yeah Kim Leng.

    This comes after reports on Thursday that the RM1 billion EDL, which has not been allowed to collect any tolls since it opened in April, will be taken over by the government ― a move that could potentially utilise taxpayer funds and increase the country’s public debt levels.


    Yeah said future highway operators now needed to be mindful that government support for toll collection was fluid.


    “It makes it more difficult for future projects,” he told The Malaysian Insider when contacted yesterday.


    Yeah added that for government should first gauge the public’s willingness to pay the proposed toll for such future projects, as well as determine if taxpayers would agree to foot the bill for privatisation deals.


    The Malaysian Insider reported last December that the RM1 billion highway built by Malaysian Resources Corp Bhd (MRCB) would force motorists making roundtrips to Singapore via the Johor Causeway to pay about five times more than the present rate of RM2.90.


    The decision to bar the collection of tolls when the EDL opened was widely seen as a move to avoid a public backlash in the Umno stronghold state in the run-up to the general election.


    The steep increase in tolls would have provided fodder for the opposition, especially PKR, which held its national congress in Johor late last year to signal its ready to take over the state despite not winning a single seat in the Umno fortress during Election 2008.


    Over 50,000 vehicles cross the bridge daily, mostly Malaysians living in and around the state capital who commute to the island republic to work.


    The lack of revenue prospects since the new highway opened, however, caused the Islamic bonds issued by EDL’s owner ― MRCB Southern Link Bhd’s ― to be downgraded by RAM earlier this month.


    Malaysia has seen the sprouting of privately operated toll highways since the 1980s and tolls were a major issue during the last general election.


    The Najib administration has attempted to address public unhappiness over tolls, and either reduced rates or completely abolished tolls at several highways in and around Kuala Lumpur.


    PLUS Expressways Bhd, which operates the North South Expressway, was also taken over by the UEM Group, a government-linked corporation, and national pension fund EPF for RM23 billion in 2010.


    After the takeover, PLUS Expressways said it would agree to lower toll hikes and forego compensation in exchange for a longer concession period.


    The latest toll project to come under scrutiny from the opposition is the West Coast Expressway being built by Kumpulan Europlus for RM7 billion, due to its interest subsidies and RM2.24 billion soft loan from the government.



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    Putting a brave face to it. The problem is lack of consultation with the public about a project that affects them tremendously and given out in secret to cronies. Now UMNO is going to bail out the crony at the people's expense. Did Shahrir ever raised any objections to the project in the beginning? If no, why not?

    Shahrir Samad says vindicated by planned EDL buyout

    By Lee Wei Lian
    September 01, 2012
    A general view of the Johor-Singapore Causeway. Toll collection at the EDL would have caused a six-fold hike in fares for round trips to the island republic. — WikiMedia Commons



    KUALA LUMPUR, Sept 1 ― The government’s proposed takeover of the controversial Eastern Dispersal Link (EDL) reported on Thursday was timely and vindicates the principle that there should be no toll without free alternatives, said Johor Baru MP Tan Sri Shahrir Samad.

    The EDL has not been allowed to collect tolls since it opened in April, in a move widely seen as an attempt to stave off any backlash in the Umno stronghold state of Johor ahead of the general election. The moratorium has severely affected the toll concessionaire’s financial prospects.


    “This is a great Merdeka present,” said Shahrir when contacted by The Malaysian Insider yesterday, adding that he had previously objected to the collection of tolls on the EDL.


    “We were debating it because you cannot impose a toll without providing an alternative road,” he said. “This is the principle. There should be an alternative.”


    The federal government said on Thursday that it will buy out the EDL in Johor Baru from concession holder Malaysian Resources Corporation Berhad (MRCB), in an apparent move to prevent a potential six-fold toll increase for round trips to Singapore from becoming election fodder for Pakatan Rakyat (PR) in the Umno bastion.


    Over 50,000 vehicles cross the bridge daily, mostly Malaysians living in and around the state capital who commute to the island republic to work.


    While the details of the takeover were not announced, the deal is widely expected to cost the government RM1 billion and could potentially push the country’s public debt levels closer to the legal ceiling of 55 per cent of gross domestic product (GDP).


    The country’s debt currently stands at about 53 per cent of GDP.


    Malaysia has seen the proliferation of toll highways since the 1980’s during the country’s headlong rush into privatisation.


    The tolls concessions, many of which have been criticised as being sweetheart deals, came back to haunt the Barisan Nasional, however, as bitter opposition to toll rate increases helped contribute to record losses during Election 2008.


    The Najib administration has attempted to tackle the unpopularity of tolls by working with concessionaires to reduce and, in some cases, abolish tolls outright along some tolled roads in and around the nation’s capital.


    However, the moves have not prevented more toll controversies from surfacing, including the recently proposed sale of the RM1.7 billion Maju Expressway (MEX) that was built using government assistance, which appeared to give owner Maju Holdings a profit of between RM600 million and RM1 billion after just four years of operation.


    The government has since denied approving the sale of MEX.


    The proposed RM7 billion West Coast Highway has also come under scrutiny from the opposition due to the interest subsidies, lengthy concession periods and soft loans being given by the government.



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    And now, it's PR's fault for forcing BN to bailout MRCB.

    EDL: Acquisition a mistake and due to pressure from PR, says Jazlan


    By Lee Wei Lian

    September 02, 2012


    KUALA LUMPUR, Sept 2 — The government’s decision to acquire the Eastern Dispersal Link (EDL) in Johor Baru is at least in part due to pressure from wrong information spread by the opposition and is not a good move, said Umno’s MP for the Johor consituency of Pulai.


    Datuk Nur Jazlan Mohamed (picture), who is also the Pulai Umno division head added that the government should not reverse a privatisation deal that was the result of years of deliberation and after the contract had already been signed.


    “The government reversed the decision because Pakatan Rakyat (PR) also is fooling people with their Buku Jingga where they promise things they know they can’t fulfil like toll free roads,” Nur Jazlan told The Malaysian Insider.


    “We need infrastructure to be privatised and paid for by the public.”


    PKR’s strategy chief Rafizi Ramli has said that the government’s proposed takeover of the EDL that was reported Thursday actually confirms that the fundamental economic principles in the Buku Jingga can be carried out and are beneficial.


    He also said that Putrajaya’s move to prevent an expensive toll fare hike appeared to be lifted from among the 10 economic policy proposals laid down in Buku Jingga.


    The Buku Jingga or Orange Book is a document that outlines the general policy framework devised by the federal opposition pact that they say they will use should they come into power.


    But Johor Baru MP Tan Sri Shahrir Samad said in response that there was nothing for the government to copy as no toll was allowed to be imposed on users since the EDL opened in April.


    “He should ask Johor PKR leaders to really read up on Buku Jingga because they didn’t refer to Buku Jingga when PKR Johor made their protests,” said the veteran Umno leader.


    He also said that he himself had long been against the principle of toll collection on the EDL without providing alternative routes.


    “We were debating it because you cannot impose a toll without providing an alternative road,” he said. “This is the principle. There should be an alternative.”


    Shahrir also said Pakatan Rakyat itself appeared to be inconsistent with the Buku Jingga as Selangor state agency PKNS still holds an indirect 25 per cent stake in Genting Sanyen Power despite the Buku Jingga being against subsidies for Independent Power Producers.
    The move to bar EDL from collect tolls since it opened in April is widely seen as an attempt to stave off any backlash in the Umno stronghold state of Johor ahead of the general elections but had the effect of severely impacting the financial prospects of the toll concessionaire, MRCB Southern Link Bhd.


    The steep increase in tolls — which could have forced motorists making roundtrips to Singapore via the Johor Causeway to pay as much as six times more the present rate of RM2.90 — could have provided fodder for the opposition, especially PKR which held its national congress in Johor late last year signalling that it is ready to take over the state despite not winning a single seat in the Umno fortress at the last general election.


    Over 50,000 vehicles cross the causeway daily, mostly Malaysians living in and around the state capital who commute to Singapore to work.
    The government’s proposal to takeover the RM1 billion highway from MRCB is perceived to be a last resort solution to the lack of a new revenue model for the EDL.


    While details of the buyout were not revealed yesterday, observers expect the deal to cost taxpayers at least RM1 billion which could bump up the federal debt from about 53 per cent of GDP last year.


    The lack of revenue prospects since the new highway opened caused the Islamic bonds issued by MRCB Southern Link Bhd — to be downgraded by RAM Ratings earlier this month.


    RAM Ratings chief economist Yeah Kim Leng told The Malaysian Insider in an interview published yesterday that the takeover of the EDL by the government could make things more uncertain for future toll projects given that they have to be mindful that the government could reverse support due to public pressure.



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    Saturday, 01 September 2012 17:08

    As expected Umno-linked MRCB seeks compensation for govt takeover of JB highway









    Malaysian Resources Corp Bhd (MRCB) hopes the government will take over the 8.1km Eastern Dispersal Link (EDL) in Johor and its debt as soon as possible, as the highway is eating into the group's profitability.


    "We will also be seeking compensation from the government. In the meantime, we will focus on existing projects and other ventures," a company official told Business Times.


    However, he declined to say how much MRCB will be seeking from the government.


    MRCB, a property and infrastructure developer, reported a 71.32 per cent fall in net profit to RM5.2 million in the second quarter ended June 30 2012, from RM17.98 million in the previous corresponding period.


    This is attributed to non-recognition of revenue from the EDL due to non-tolling issues.


    The EDL, which opened on April 1, became a hot topic after it was announced that road users to and from Singapore face a RM15.30 toll.


    The RM1.4 billion expressway links the Customs Immigration and Quarantine Complex (CIQ) and the North-South Expressway via the Pandan Interchange in Johor Baru. MRCB was awarded the project under a 30-year concession.


    The concession agreement stated clearly that toll collection will be at the CIQ and start in May, which will then allow MRCB to meet its debt repayment obligations.


    As at December 31 2011, MRCB had senior and junior sukuk amounting to RM1.06 billion, which were secured by the EDL project and repayable in a series of yearly redemption commencing in 2018.


    MRCB is required to service the finance costs - to the tune of RM7 million a month - despite no toll charges for the EDL.


    It is learnt that MRCB has accumulated some RM40 million start-up losses for the EDL when it opened in April.


    At the company's shareholders meeting in April, MRCB chairman Tan Sri Azlan Zainol expressed hope that the government will consider buying the EDL at market value.


    "We hope that there will be a win-win situation for the government, the people and MRCB shareholders. We do not know the market value but the total project cost was RM1.4 billion," Azlan said.


    MRCB has been negotiating with the government since May for some form of compensation to cushion the operating costs as well as the possibility of agreeing in-principle to take over the expressway.


    On Thursday, Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said the government will acquire the EDL from MRCB to settle issues related to policy and toll charges.


    He said the cost and terms are expected to be known before the end of the year


    -Business Times




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    Putrajaya urged not to shell out for ‘loss of future profits’ in EDL takeover



    September 03, 2012


    KUALA LUMPUR, Sept 3 — Putrajaya should not have to pay more than RM1.3 billion to highway toll operator Malaysian Resources Corporation Berhad (MRCB) to take back the concession for the controversial Eastern Dispersal Link (EDL), an opposition lawmaker said today, and urged the federal government to disclose full details of the agreement.


    Petaling Jaya Utara MP Tony Pua (picture) said he welcomed the government’s announcement last week that it would be buying back the RM1 billion highway in Johor that could have seen road users pay a six-fold toll hike for a roundtrip to Singapore.


    But, he said, the government should now declassify the concession agreement to prove that the compensation package would be fair and not lopsided to benefit the concession holder as in past projects.


    “There’s no reason why the government cannot do this as past concession agreements have already been declassified by former Works Minister Datuk Seri Mohd Zin Mohamed in 2009.


    “We do not want the government to agree to buy back the concession only to compensate for ‘loss of future profits’ to MRCB — which effectively means taxpayers’ money will be used to pay for toll upfront to MRCB,” he said in a statement.


    He gave as an example of lopsided highway deals the aborted Gerbang Perdana “crooked bridge” — also in Johor — which saw the federal government using RM257 million from public funds to compensate the contracted highway concessionaire.
    “This was despite the fact that they would only be paid RM100 million to build the bridge,” he said.


    Pua said based on the terms in past concession contracts, the government was only required to pay for the “value of the construction works” of the highway and “12 per cent interest returns per annum to shareholders’ capital and loan invested”.


    According to his calculations, the government only need pay MRCB a sum amounting to not more than RM1.3 billion.


    “By paying MRCB anything more than RM1.3 billion, it will show that BN is abusing its powers to profit its crony companies and is failing in its fiduciary duty to protect and defend the interest of ordinary Malaysian taxpayers,” he said.


    Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop had announced on August 30 that the government would take over the EDL after talks between both parties.
    By paying MRCB anything more than RM1.3 billion, it will show that BN is abusing its powers to profit its crony companies and is failing in its fiduciary duty to protect and defend the interest of ordinary Malaysian taxpayers. — DAP MP Tony Pua
    MRCB had proposed a RM9.10 toll in each direction for passenger vehicles using its RM1 billion EDL highway from the Causeway to the immigration post.


    However, the Umno-linked company is using an open toll system that charges the full fare at the new Customs, Immigration and Quarantine (CIQ) checkpoint regardless of where motorists exit or enter the highway — the latest facility for the ambitious Iskandar zone that celebrates its fifth anniversary this weekend.


    The rest of the 8.1km stretch leading to the Pandan interchange of the North-South Expressway will be free to motorists.


    Local business leaders had expressed concerns that with the new CIQ already taking Singapore tourists away from downturn Johor Baru, the EDL will see them skip the more inland Tebrau area as well.


    Taxi drivers also called for an exemption as it would otherwise be unfeasible to ferry passengers across the Causeway.


    The EDL opened on April 1 without any toll collection after being delayed from a scheduled first-quarter launch.


    In a visit to Johor in March, Prime Minister Datuk Seri Najib Razak had promised a solution to the controversy.


    Over 50,000 vehicles cross the bridge daily, mostly Malaysians living in and around the state capital who commute to the island republic to work.


    Johor Baru’s economy is also heavily reliant on Singaporeans who cross the Straits of Johor to enjoy cheaper prices there.


    Putrajaya set up the Iskandar zone five years ago to turn Johor Baru and its surrounding region into an economic growth area catering to the spillover from Singapore.


    Cars and lorries exiting Singapore and heading into Johor now pay RM2.90 and RM5.50 respectively to use the bridge while motorcycles, which make up more than half of traffic across the Causeway, are exempt from the toll.


    Singapore’s Straits Times reported in 2008 that rates will be raised every three years of the 30-year concession and will peak at RM14.60 for passenger vehicles and RM29.20 for lorries.



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    Malaysia avoids default with toll-road takeover




    • Kit Yin Boey, Reuters


    • 1:35PM Sep 3, 2012


    Creditors facing a potential default on the MRCB Southern Link project bonds have been offered a lifeline after the federal government said last Thursday that it would take over the new Eastern Dispersal Link (EDL) in Johor Baru from the troubled concessionaire.

    Fears that MRCB Southern Link was heading for a default in as little as four months prompted the government to step forward. The saviour in this case, however, was also the offender: it was the government’s ban on collecting tolls for the new highway project that caused default concerns in the first place.

    The fact that the toll ban is legal under a concession agreement highlights the regulatory risks faced in privatised projects in the country.

    The timing is not great for such a lack of regulatory clarity. Malaysia is in the middle of ramping up a massive infrastructure development programme that will need billions of dollars from the bond market. The federal government is on a RM230 billion (US$73.77 billion) programme to build a host of infrastructure projects, including power plants, toll roads, railways and property projects.

    Some of the projects have already been awarded to private operators and tapped the market this year, including Prasarana’s RM2 billion dual-tranche deal two weeks ago, Tanjung Bin’s RM3.29 billion funding in March and Tenaga Nasional’s RM4.85 billion financing last year.

    Infrastructure projects are expected to drive the ringgit bond market to a record RM100 billion in volume this year, surpassing last year’s gross volume of RM67 billion.

    All tolled

    But the government has shown in the past that it is not immune to public sentiments. It has interfered and caused concession agreements to seize up. After the global financial crisis, the government halted toll rate hikes in several projects, forcing some bond issuers to restructure debt.

    The latest stumble came in March this year. The federal government banned MRCB from implementing toll charges on a newly-completed Eastern Dispersal Link Expressway in Johor Baru. That road opened on April 1 and has since then seen no cashflow.

    The concessionaire managed to meet its previous interest payment obligations. But investors were not certain the next payment, due in December, would come through. Ram Ratings suggested as much when it reported that MRCB made an unexpected RM40 million payment to its engineering, procurement and construction contractor, despite private assurances that it would keep aside enough funds to pay the interest in December.

    This leaves only RM21 million in the company’s cash reserves, hardly sufficient to meet a RM47 million cumulative interest payment due Dec 21 on its RM1.04 billion senior and junior sukuk, as well as on a RM220 million syndicated bank loan. The shortfall is a reason Ram Ratings downgraded the long-term ratings on the RM845 million senior bond to BB3 from A2 and the RM199 million junior sukuk to C1 from BBB2.

    Earlier last week, there was no sign from MRCB that it planned to fund any shortfall in meeting the debt obligations, the Ram report said. The company has not breached any of the technical covenants in the bonds, and the payment to the EPC contractor has not triggered an event-of-default clause for bondholders.

    If MRCB defaulted on its payments, it would be one of the first toll road concessionaires to do so.

    A default would impinge on an otherwise booming bond market. MRCB had been in talks since March with the federal government about plans for compensation in lieu of the toll revenues. But the discussions had dragged on without any conclusive details until last Thursday.

    Officials from the Prime Minister’s Office said the government would take over the project but it was short on details. Final details of the takeover are expected only before the end of December. But the market will expect the government to take on the debt and possibly impose a smaller toll than the proposed RM6.20 under the original concession.

    A road travelled

    The government’s move was not completely unexpected. It has resolved troubled concessionaires in the past by extending the concession, reducing the toll or water rate, or buying bonds.

    In June, the government established Pengurusaan Air, which sold a RM5.8 billion sukuk in June 11 to buy various debt facilities from several water concessionaires.

    “Regulatory risks have increased compared with the past, but the government has in general shown that it would treat equitably those concessionaires hurt by its edicts,” said one credit analyst.

    But detailed negotiations for MRCB may be impeded by an impending general election that could make decision-makers wary of undertaking any unpopular actions. Elections were expected to take place after September. But preparations for the haj in October and the annual Umno session in the last quarter of the year may further push back the elections to next year.

    In the meantime, the company is thought to be seeking creditors’ consent to amend terms on its sukuk, particularly to waive certain covenants such as the finance service reserve account bank guarantees to allow drawdowns for the toll road operations to continue.

    - Reuters
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    Johor DAP: Plus should foot EDL construction bill



    3:39PM Sep 2, 2012

    Johor DAP has blasted the government’s announcement of the takeover of the EDL highway that includes paying the concessionaire for the construction costs.

    “DAP Johor questions the recent annoucement by the Minister in the Prime Minister's Department Nor Mohamahad Yacop for the government to shoulder the cost to acquire the Eastern Dispersal Link Highway (EDL) from the Malaysian Resources Corp Bhd (MRCB).

    “DAP Johor holds the view that neither Johor commuters nor the tax payers in general should shoulder the construction cost of the EDL.” said DAP Johor chairperson Boo Cheng Hau (left) in a statement today.


    He said making the taxpayer’s to foot the cost of the 8.1km highway - that connects the end of the North-South Expressway Southern with the Sultan Iskandar Customs, Quarantine and Immigration Complex (CIQ) - is “asking the people to pay for a failed rental economy created by Umno-BN itself”.

    Instead, said Boo, “Umno-linked” Plus Bhd should be the one to foot the costs, since it had been collecting from Johor Bahru toll plazas over the past 20 years.

    “Plus Bhd, an Umno-linked company, was given the concession to collect tolls at Johor Bahru CIQ and Senai federal trunk roads, respectively, amidst protests from the Johoreans because virtually no work was done by Plus Bhd except for installing toll plazas on the mentioned existing federal trunk roads.

    Money for nothing?
    “Based on the daily number of 60,000 vehicles using the causeway, Plus Bhd has collected between RM 876 mllion to RM 1.50 billion in the past 20 years,” said Boo.

    The state opposition leader said Plus should therefore use the money earned to pay for the EDL as its construction should have been Plus’ responsibility in the first place.

    “The amount collected by the Plus Bhd shuld have been meant for constructing a highway between the Johor Bahru CIQ and North-South Highway entrance at Pandan.

    “Nonetheless, no work and highway service has ever been provided (by Plus) for the past 20 years,” he said.

    Boo called on the government to disclose the concessions contract with Plus Bhd to explain how the company can shirk its responsibility.

    The EDL has been a sore point with Johoreans for the excessive toll that is imposed even for motorists who do not actually use the highway after passing through the CIQ.

    Last Friday PKR strategy director Rafizi Ramli, while lauding the government for finally deciding to take over the EDL, warned that the exercise could be used to smuggle the rakyat's money into the coffers of BN cronies.

    Rafizi said PKR will move a parliamentary motion on the formation of a select committee to study all purchases of major assets from companies to ensure transparency and fairness.
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    Toll-free means problem-free? — Lim Mun Fah



    Admin: UMNO will screw you no matter what.


    September 28, 2012
    SEPT 28 — Prime Minister Datuk Seri Najib Razak told the Dewan Rakyat that the government will not impose toll on the Estern Dispersal Link (EDL) in Johor Baru after it takes over the expressway from the concessionaire.

    He also gave an assurance that the final decision will safeguard the interests of all, including the people, the loan provider, the concessionaire and the government.


    The news report was not conspicuous, but still caught the eyes of local residents. To put it more precisely, it is good news, but not good enough to be spread around. It is because local residents understand that there must be a price to pay behind the so-called good news.


    To be fair, although the quality of the expressway has been criticised, it is still considered a rare successful transportation network design in Johor Baru. Since its opening in April this year, the local traffic condition has indeed been greatly improved and it has received more praise than complaints from road users.


    However, such a pleasing development project has caused strong dissatisfaction from local people due to its high toll charges. Why?


    Instead of opposing to imposition of toll, local people are actually opposing the absurd calculation logic of the charges. According to the original design, the toll station is located at the Johor Baru checkpoints. In other words, regardless of whether you use the EDL or not, you will still have to pay a big sum for toll once you enter the checkpoints. It charges RM6.20 per one-way travel on the 8.1km-long EDL.


    The issue created a hubbub. It overwhelmed the government when there was an uproar among the people and Pakatan Rakyat took the opportunity to attack.


    Well, the prime minister has finally given an assurance that the government will not impose toll on the EDL. However, does it mean that all problems are solved following the assurance announcement?


    Indeed, it seems to be good news and even a victory of public opinion! If we think deeper, however, is there such a thing as a free lunch in the world?


    The EDL cost RM977 million and MRCB Lingkaran Selatan Sdn Bhd (MLSSB), a wholly-owned subsidiary of Malaysian Resources Corp Bhd (MRCB), has 34 years of concession and operating right. Since the government has expressed its will to take over, let’s think about the following questions.


    Would the MLSSB hand over the concession and operating right just like that? Of course compensation will be involved!


    Then who will pay for the compensation? Of course the government will!


    Where is the government’s money from? Of course it is from tax revenues!


    And who actually pay the taxes? Of course the answer is the people!


    In other words, you pay for whatever you are given!


    Since we are spending our own money, shouldn’t we be concerned even more about whether every single sen has been wisely spent? Is the EDL, which costs more than RM900 million, really worth it?


    Another question is, how could the initial toll design be so unwisely done? It is even completely contrary to the principle of fairness and is one-sided in favour of the operator.


    Without solving the root problems and reforming the problematic system, the crisis will still exist even though the toll station will no longer be built. It is because the same problem can still appear in any other development projects! — mysinchew.com


    * This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.
    py

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