Tuesday, May 04, 2010

Silence Usually Means "No"

I thought this was over already. Now they are bringing this up again. Owing to the size of the deal, it cannot be left at private hands. There is too much riding on this. EPF should sit down and analyse the pertinent points of the deal. If its doable, then EPF should do the deal, not individuals. If the individuals are confident, they can be considered as a new management team and get a small percentage of "improved efficiencies". The key when making such a big proposal is the "greed factor" - you know this cannot go down well with the public, not at this juncture of more openness and transparency.

What the public should know is what the group Asas Serba will get if they make it work - its going to be an astounding amount. They would be better off to offer "solutions" and propose a small profit share incentive: e.g. if toll rates can go down by 20% and all other profit and cost measures stay constant, then the group may share RM20m as a bonus and go up to RM50m over 3 years if the metrics and goalposts are reached, or some other form of caps and incentives. Not divulging the "pot of gold" will never fly with the public.

We all know that 25 tollways cannot reside in private hands because if the deal does not work out, there is no way the group can redress the losses before giving it back to the people. If it does not work, the government will have to bail out the project (again). Because certainly the group does not have even RM100m in capital to sustain any kind of losses.

So, is there a magic elixir for the group to cut costs, reduce toll rates and still make everyone smile? I guess there is, if I was given the task to take over the 25 highways, the first thing I would do, erect tons of platforms for billboard advertising, revised all advertising rates with a 50% mark up. If you look at advertising on highways, we are still 10 years behind developed countries. We are only doing the very basic billboard stuff now.

Humongous 3D Soccer Player Billboard

Guy Running Thru Building Billboard Design

Mini Headlights Billboard Design
20 Creative Billboards
Privately-held Asas Serba Sdn Bhd has asked the government to reconsider its plan to buy 25 toll highways for RM50 billion as its ambitious bid did not receive any response.

The company, owned by four individuals, made the proposal a year ago, pitched as a way to remove the headache the government faces when toll rates are due to rise.

Asas Serba chairman Datuk Syed Amin Aljeffri said the plan would end toll rate increases and the government could save RM114 billion in compensation payments until 2038.

The government will no longer have to compensate toll highway firms when rates are not increased, freeing resources for other development projects.

"Under our proposal, toll rates can be reduced by another 20 per cent, no more toll rate increases and there will be other perks for road users," Syed Amin told reporters at a media briefing in Kuala Lumpur yesterday.

For instance, low-income earners will pay one standard toll rate for each travel.

Under its proposal, highway users will pay 11.97 sen a km for using the North-South Expressway, compared with the 2002 rate of 12.36 sen, over the next 18 years, which is the tenure of PLUS Expressways Bhd's concession.

Asas will set up a new concession company which will buy all existing toll roads by raising RM50 billion from a bond sale.

1 comment:

Ivan said...

genius . .thinking. . .
but i x think the deal will be done. . .cause plus is cash flow like casino for gov

2) asas serba company plp formely is from renong.. now say guarantee no raise.. under the sun, anything can happen. ..