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||31 August 2009
Analysts: Malaysia toll consolidation could be costly
Pricing and funding will be the biggest hurdle if Asas Serba Sdn Bhd were given the green light by Malaysian government to take over all the 22 toll concessions in the country, the StarBiz newspaper quoted analysts as saying.
“How to price the toll concessions? If we take the water consolidation in Selangor as an example, there are already many issues despite the fixed pricing at one-time book value,” OSK Investment Bank analyst Jeremy Goh told StarBiz in a telephone interview.
The discounted cashflow (DCF) value could be an alternative method but given that it was based on future earnings, the seller would lobby the positive assumptions for future income to get the best price, while the buyer saw the negative ones, he said.
A bank-backed research house said in a report that taking into account the DCF value of PLUS Expressways Bhd alone could boost the value of the company to over 20billion ringgit (1$=3.8ringgit).
The acquirer would also need to consider the bonds issued by concessionaires totalling 26 billion ringgit if it wanted to take over all 22 toll concessions, which would bump up total costs.
The little-known private entity is represented by Datuk Syed Md Amin Aljeffri, chairman of Kuala Lumpur Malay Chamber of Commerce; Ibrahim Bidin, president and CEO of Pinelabs (M) Sdn Bhd and former PLUS chief operating officer, amog others.
It was reported recently to have submitted a proposal to the Government to take over toll concessions.
Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop, however, denied receiving such a proposal from any party and added that the Government was still mulling over the options to take over PLUS that would be affordable and comfortable for consumers.
Meanwhile, Goh said the concessions had contributed signficantly to their respective owners like Gamuda Bhd and IJM Corp Bhd, whose construction business was impacted by the downturn.
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