Ekovest: Government loan will help reduce toll rates for Setiawangsa-Pantai Expressway

Ekovest: Government loan will help reduce toll rates for Setiawangsa-Pantai Expressway

PUTRAJAYA, 17 June: Road users can expect low toll rates for the new Setiawangsa-Pantai Expressway (SPE) thanks to the government’s interest-free reimbursable interest assistance (RIA) of RM560 million for the project. The project is expected to be completed and operational by 2020.

Yesterday Ekovest inked agreements with four financial institutions for the issuance of sukuk Wakalah worth RM3.64 billion to finance SPE.

Speaking to reporters after the signing ceremony, Ekovest managing director Datuk Seri Lim Keng Cheng said RIA is an advanced payment by the government to help the group during the construction period.

Payment of the RIA will be made to Ekovest’s wholly-owned subsidiary, concession holder Lebuhraya DUKE Fasa 3 Sdn Bhd, in stages within three years.

“If not, the financing cost would be very high. We would start paying back (the government) by the eighth year from the day we start the contract,” he explained.

Lim pointed out that the upfront payment from the government would allow the public to enjoy low toll rates, which is estimated at a total of RM7 for the length of the 32.1km highway and will have two toll booths, at the start of the concession.

“When it comes to a certain point of time, the toll rates will become fixed, so that’s part of the package as well,” he explained.

At the peak, Lim said the highway can cater to 300,000 vehicles a day.

With debt service covering ratio and interest incurred during the construction period, he said total cost for the SPE would be RM5.05 billion. Construction cost alone is RM3.9 billion.

The concession agreement for SPE was signed on Jan 11 and proposal for the highway has been in the works since early 2010.

As part of the financing structure, Ekovest will also inject RM850 million as equity into the project.

AmInvestment Bank Bhd is the principal adviser/lead arranger for the sukuk issuance, while its joint lead managers/joint bookrunners are AmInvestment Bank Bhd, CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.

The sukuk has been assigned a rating of AA- by Malaysian Rating Corp Bhd (MARC).

The highway will link MRR2 at Universiti Tunku Abdul Rahman to the Federal Highway/Kerinchi Link as well as providing connectivity to existing highways such as DUKE, Akleh, MEX and NPE.

In its report in June, MARC said it views the construction risk on the DUKE Phase 3 project to be largely mitigated by Ekovest’s track record in which it had completed the DUKE Phase 1 project and is currently undertaking the DUKE Phase 2 project that is scheduled for completion by end-2016. 

On another note, Lim did not rule out the possibility of monetising its highway assets.

“We welcome all the proposals, we can use the money from asset monetisation for our future infrastructure and shopping malls,” he said.

— THE SUN

Share