Putrajaya has right to terminate toll agreements earlier, says minister

Putrajaya says the third generation of toll agreements it signed with highway concessionaires provides for earlier termination. – The Malaysian Insider pic, April 7, 2014.Putrajaya can terminate toll concession agreements before their expiry dates if concessionaires recoup their investment costs earlier, Works Minister Datuk Fadillah Yusof told Parliament today.

He said this arrangement was among the improvements to toll contracts agreements signed between Putrajaya and concessionaires, since the first generation of these agreements were signed in 1987.

According to Fadillah, the first generation of toll agreements between 1987 and 1995 were for a duration of between 23 to 33 years, involving 11 highway concessionaires.

"In the second generation toll contracts, signed for the the duration of 30 to 35 years, the government's risk exposure was reduced, for instance, if the highway achieved full capacity in terms of traffic, the onus is on the concessionaire to increase the number of lanes and level of service using their own funds.

"And in the third generation agreements, although the tenure is longer between 45 and 65 years, the government can terminate the agreement earlier if the concessionaire manages to recoup the investment put in," he said to a question from Tan Seng Giaw (DAP – Kepong) on when the agreements signed with the 30 toll concessionaires would end.

MORE TO COME