Thursday, 23 December 2010

Malaysian toll road company, Plus Expressways, to be "privatised"

PLUS Expressways is Malaysia's biggest concessionaire toll road company, and one of the largest toll road companies in Southeast Asia.  It is part of the UEM Group, which itself is a wholly owned subsidiary of Malaysian government investment company Khazanah Nasional.   So PLUS is a government owned company.

It owns subsidiaries in Malaysia, India and Indonesia.  973km of tolled expressways in Malaysia are under the responsibility of PLUS.  PLUS is an acronym for its first concession company formed in 1986 - Projek Lebuhraya Utara Selatan -which itself is responsible for the North-South Expressway from the Thai border to Kuala Lumpur and south to Johor Bahru (border with Singapore), otherwise known as Routes E1 and E2.

PLUS subsidiaries are:
- ELITE (responsible for the E6 North-South Expressway Central Link, effectively a Kuala Lumpur bypass).
- LINKEDUA (Malaysia-Singapore Second Link and associated expressway);
- KLBK (E15 Butterworth-Kulim Expressway);
- PHS (Helicopter charter company);
- TERAS (E-commerce and online facilities management);
- PLUS BKSP (India responsible for the 21.6-km Bhiwandi-Kalyan-Shil Phata Highway in the state of Maharashtra);
- LMS (Indonesia responsible for the 116-km Cikampek-Palimanan toll highway); and
- CCTW (Indonesia responsible for the as yet incomplete 25.4-kilometre Package 4 Cimanggis-Cibitung Toll Road).

Maps are on the PLUS website, showing how it is responsible for most of the major routes in Malaysia.  It is proud of its rest areas, laybys, viewpoints and even roadside motels and restaurants.  Given it competes not only with free existing roads, but also the railway and airline services, it clearly seeks to attract motorists.  Tolls are manual with barrier based ETC, but a transition has already started to create fully electronic free flow toll points such as on the Malaysia-Singapore Second Link.   It is government policy to move all toll roads to multi-lane electronic free flow tolling to reduce congestion.

It even has its own highway patrol unit.  Another feature of PLUS is a loyalty programme, whereby motorists earn the equivalent of frequent "drivers' points", based on distance travelled.

PLUS was listed on the Malaysian stock exchange in 2002.   45% of the company is not held by the Malaysian government, but divided between a pension fund and a wide range of small shareholders.  

However, the privatisation being touted in Malaysian media actually does not necessarily mean the private sector buying out the state shareholders, but may include the state shareholders buying out the private shareholders as well  - privatisation meaning removing it from being publicly listed.

The reason for the state shareholders to seek to buy out the private sector is because government recently announced tolls would be frozen for the next four years, making it a less attractive investment in some eyes.

Still, once again it shows how highways can be managed, by and large, commercially and operate effectively and efficiently.  It's a model virtually unknown in North America.

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