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Wednesday, April 4, 2012

MRCB hopes to sell back expressway to Govt

KUALA LUMPUR: Malaysian Resources Corp Bhd (MRCB) is open to selling its Eastern Dispersal Link (EDL) expressway back to the Government following the latter’s decision to review the company’s toll concession mooted in 2008.

“I’m sure the Government have many options to consider, and one of them is to impose a levy on Singaporean vehicles, and the other option, hopefully from our point of view is to buy the EDL off us at market value,” said MRCB chairman Tan Sri Azlan Zainol in a briefing after the company AGM.

He said the cost of the EDL was estimated at around RM1.4bil, and hoped a decision to be made in May.

“We leave the decision to the Government, and we are in constant touch with the authorities to consult and advice,” he said.

Fielding questions: Razeek (left) and Azlan at the briefing.

The 8.1km EDL links the North-South Expressway to the Johor Customs, Immigration and Quarantine Complex, and into Singapore directly at an effective toll rate of RM6.20 per travel.

Based on MRCB’s internal projections of about 60,000 vehicles utilisation rate daily for the EDL, it would generate about RM135.7mil in cash annually for the company with increases in toll charges every few years under the old concession agreement.

“We hope that this will be resolved soon as it will impact the company and collections. We had budgeted to start tolling in May,” he said, adding that the EDL had experienced good traffic response since it opened on Sunday.

Recently, the EDL had drawn controversy when it was reported that MRCB would require motorists travelling to Singapore via the Johor Causeway to pay about five times more than the current toll rate of RM2.90.

On Monday, the Malaysian Highway Authority director-general Datuk Ismail Salleh said vehicles would not be charged toll for now as the Government was still finalising the details.

On company’s prospects this year, Azlan said that it would be a challenging year while trying to maintain its profit at its current level.

“For 2013 onwards, we think our profit would be much better as a lot of the projects that we are currently doing would be completed in 2013. We are also steering the company’s direction towards property development,” he said.

He said the property development business offered better profits compared with construction and engineering. Currently property development contributes about 75% to the company’s profit and 40% to the group’s total revenue.

“We have about RM2.7bil in borrowings based on project financing, and we are prepared to try and chew at what we can.,” he said.

Azlan said MRCB would concentrate in the Klang Valley, as it still deemed the area with growth potential, while also looking at land in Johor and Penang.

Meanwhile chief executive officer Datuk Mohamed Razeek Hussain said the company had three mega projects which would keep it busy for the next three to four years.

“We have at the moment five acres in Brickfields worth RM1.8bil in gross development value (GDV), 27 acres in Setapak worth RM1.7bil in GDV and Penang Sentral, along with a small parcel near Jalan Kia Peng worth RM350mil in GDV,” he said.

By The Star

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