WCE has broken Malaysia's privatisation record, says MP

5:14PM Jan 4, 2013

The privatisation agreement between the government and Kumpulan Europlus Bhd (Keuro) to construct and operate the West Coast Expressway project has broken Malaysia’s privatisation record as the longest highway toll concession, said an MP.

DAP’s Taiping MP Nga Kor Ming today urged the government to explain the unreasonable 60-year toll concession.

He pointed out that the 233km highway connecting Banting and Taiping will cost RM7.07 billion or RM30 million per kilometre.

“This construction cost is more that double the cost of the same type of highway in India which is RM10 million per kilometre. The people have the right to ask the government to reveal the details (of the concession),” he said in a statement today.

The same argument has been raised by DAP publicity secretary Tony Pua and secretary-general Lim Guan Eng early last year, but Prime Minister Najib Abdul Razak argued that Keuro been selected based on its efforts and expenses in carrying out projects in the past.

According to a report by Malay Mail last February, attorney-general Abdul Gani Patail had expressed reservations over the concession terms which are said to heavily favour Keuro.

In a filing to Bursa Malaysia on Wednesday, Keuro said West Coast Expressway Sdn Bhd (WCE), an 80 percent subsidiary of the company, has entered into a concession agreement with the government to develop the highway.

Public listed construction conglomerate IJM Corp Bhd effectively owns 38.2 percent of WCE through a 30 percent direct ownership and a 23 percent stake in Keuro.

The project cost has leaped by 134.5 percent from RM3.015 billion for 215.8km, when Keuro and the government entered into the first agreement in 2007, to RM7.07 billion for 233km in 2011 after four years of renegotiation and delays.

The concession period has nearly doubled, from 33 years to 60 years.

Keuro also enjoys additional benefits including a RM2.24 billion soft loan at four percent interest and an interest subsidy of up to three percent from commercial loans for 22 years.

The land acquisition cost of RM980 million will also be borne by the government.

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