Focus View
PLUS needs to tell us more
FocusM team | 05 Jan 2018 00:30
PLUS Malaysia Bhd, the largest highway concessionaire in the country, has revealed it spent a whopping RM1 bil in 2016 to maintain its highways.

This is not entirely surprising because operating road networks can be an expensive business. However, maintenance spending is only part of the bigger picture.

To put things in better perspective, PLUS also needs to share more details of its financials. For example, it should declare how much it generates from each highway through toll collection. Only then, compared to expenditure, will we be able to gauge whether PLUS is running its business efficiently.

The highway operator said the maintenance cost is necessary to ensure safety of road users, adding it conducts more than 10,000 inspections and asset monitoring for its highways annually, including maintaining land along them.

For its financial year 2016 (FY16), PLUS posted revenue of RM3.97 bil and net profit of RM252.68 mil. That would mean it spent about 25% of its revenue on highway maintenance alone.

According to the PLUS website, the expressways under its portfolio total 986km. They include the North-South Expressway, New Klang Valley Expressway, Federal Highway Route 2, Seremban-Port Dickson Highway, North-South Expressway Central Link, Malaysia-Singapore Second Link, Butterworth-Kulim Expressway and the Penang Bridge.

The maintenance bill for FY16 worked out to RM1 mil spent on every kilometre of highway. Is this justified? It is hard to say until PLUS reveals more details of its revenue and spending.

For example, it should also disclose the toll collection against maintenance spending ratio for each highway. The public should be informed which highway required the most maintenance work and why. Just as important is whether PLUS is getting the most cost-effective contractors to undertake its maintenance works.

When Maju Holdings Sdn Bhd made a RM36 bil bid to acquire PLUS last year, one of the reasons given for rejecting it is that the concessionaire is a strategic national asset and steady dividends from the highway operations are beneficial to members of the Employees Provident Fund (EPF), which owns 51% of PLUS.

For the same reason, PLUS should be more transparent. Taxpaying members of the EPF should be privy to a more complete financial picture of this national asset.

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