Instead of allowing the toll hike, our government should just acquire Cerah Sama Sdn Bhd, which owns Grand Saga Sdn Bhd the concession holder of the 11.5km Cheras-Kajang Highway.
The Employees Provident Fund (EPF) acquired from Taliworks Corp Bhd a 31.85% indirect stake in Cerah Sama Sdn Bhd for RM68.68 million cash last year.[1]
After the South East Asian Strategic Assets Fund L P (SEASAF) divested its 35% equity interest in Cerah Sama Sdn Bhd at RM80 million this year[2], EPF has now increased its effective equity interest in Cerah Sama to 49% whilst the balance 51% is held by Taliworks Corporation Bhd.[3] In other words, BN Government will be able to acquire Cheras-Kajang Highway by buying 51% stake in the highway at around RM120 million.
RM120 million is not a small sum. But it is nothing if compare to the compensation paid by the BN Government to the concessionaire.
In 2003 and 2004, the government paid Grand Saga RM104.93 million in compensation, apart from waiving interest on and repayment on a RM59 million support loan given to the concessionaire. In 2012, another RM120.55 million was paid to Grand Saga Sdn Bhd for abolishing 2 toll plazas along the Cheras-Kajang Highway. In other words, as at 2012, Grand Saga has received RM284.5 million from the government as compensation.
As such, it is definitely better and wiser for the government to acquire Cerah Sama Sdn Bhd, the investment holding company of Grand Saga Sdn Bhd, especially since the concession agreement will only expire in 2045.
Cerah Sama recorded a net profit of RM18.3 million for the financial year ended Dec 31, 2013.[4] So, why opt to pay compensation when we can acquire the highway by a smaller sum, especially when BN Government will be able to recover the money by continue to collect toll for a few more years? And once BN government has recovered its costs to acquire the Cheras-Kajang Highway, road users will be to use the road for free!