Toll charges along the highways under concessionaire Plus Malaysia Bhd will be 18 percent cheaper as early as Feb 1, said the Prime Minister's Office.
Furthermore, there would be no increase until 2058.
In a statement today, the department said that the government would no longer have to compensate Plus.
"The government will save RM42 billion over the concession period (without having to pay compensation)," it added.
The trade-off for this is that the contract with Plus to operate the highways would be increased by 20 years. The contract was originally slated to expire in 2038.
Plus is a private company jointly owned by sovereign wealth fund Khazanah Nasional Bhd (51 percent) and Employees Provident Fund (49 percent).
On Wednesday, the cabinet ordered Plus to slash toll charges and extended their contract after rejecting several takeover bids by private companies.
All the private companies had offered to lower toll charges to sweeten the deal.
The review of highway contracts, with the view of abolishing toll charges, was one of the cornerstone policies in Pakatan Harapan's manifesto for the 2018 elections.
Now that the coalition is in power, it has pivoted towards reducing toll charges in stages because it was now clear that the government cannot afford to abolish toll charges.
Yesterday, Prime Minister Dr Mahathir Mohamad said that if inflation was taken into account, the fixed toll charges would be very insignificant in 30 years’ time. - Mkini
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