CONSTRUCTION Sector report Toll hikes: NPV neutral impact 15 Oct 2015 OVERWEIGHT Mak Hoy Ken (Maintained)
[email protected] 03-2036 2294 Rationale for report: Sector update Investment Highlights Higher toll rates from 15 October. The local press reported that toll charges for 18 highways in Malaysia will be raised between RM0.10 and RM3 effective from today. Out of this total, 12 are major highway concessions operating within the Klang Valley: Kuala Lumpur-Karak (KLK) Expressway, Maju Expressway (MEX), Kajang Dispersal Link Expressway (SILK), Duta-Ulu Kelang Expressway (DUKE), Stormwater Management and Road Tunnel (SMART), KL-Kuala Selangor Expressway (LATAR), Sungai Besi Highway (BESRAYA), New Pantai Expressway (NPE), Kajang Seremban Highway (LEKAS), Damansara Puchong Highway (LDP), Western Kuala Lumpur Traffic Dispersal Scheme (SPRINT) and Cheras- Kajang Highway (Grand Saga). Other highways that follow suit include the South Klang Valley Expressway (SKVE), Guthrie Corridor Expressway (GCE), Kemuning Shah Alam Highway (LKSA), Ampang Kuala Lumpur Elevated Highway (AKLEH), Senai Desaru Expressway (SDE) and Butterworth Outer Ring Road (LLB). Status quo for PLUS-owned highways. Altogether, toll rates for all eight highways under government-backed PLUS Expressway Bhd remained unchanged at this juncture. They are the North South Expressway (NSE), New Klang Valley Expressway (NKVE), Federal Highway Route 2, Seremban Port Dickson Highway, North South Expressway Central Link (ELITE), Second Link Malaysia Singapore (Linkedua), Butterworth Kulim Expressway (BKE) and Penang Bridge. Part of fiscal consolidation moves. We believe this is part of Malaysian government’s move to meet its budget deficit target of 3.2% for 2015 (2014: 3.5%) and support its sovereign rating amid a challenging global economic backdrop.