Published: Wednesday May 2, 2012 MYT 3:31:00 PM

S'gor govt wants exit clause in future highway concession deals

By TEH ENG HOCK

SHAH ALAM: Future highway concession agreements in Selangor will have to include an "exit clause" which allows for toll collection to be stopped once the concessionaire makes its projected profit.

Mentri Besar Tan Sri Khalid Ibrahim said once the projected profit was met, the management of the project would also be transferred to the state government.

"This will allow concessions to end earlier. For example, if the concession is 40 years long, but the highway concessionaire makes the projected profit within 25 years due to heavy traffic volume, then the exit clause will kick in.

"That means toll collection can be stopped and the highway will be managed by the government," he told reporters here Wednesday.

Khalid said the state government had made the proposal to include the exit clause in all highway concessionaires to the Malaysian Highway Authority (LLM).

Should any party object to the proposal, Khalid said the state government would not help them acquire the land needed to develop the highways.

There are "five or six" proposed highways in the state, he said, including the Sungai Besi-Ulu Klang Expressway (SUKE) and West Coast Expressway.

On principle, the state had agreed to the construction of SUKE as it brought economic growth to Selangor.

"Because the Federal Government is underwriting the cash flow of the project, the state government had proposed that LLM include an exit clause in all tolled highway concessions with construction profit and equity return," he said.

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