Tak percaya check sendiri

Assuming Capital structure of RM33 billion, for simplicity purposes, FCFF = operating cash flows - capex but BEFORE bond payments and dividends.

Before: 2019: RM2.5 bil FCFF, 2038 RM5.6 bil FCFF
After: 2019: RM1.9 bil FCFF (18% reduction), 2058: RM4.5 bil FCFF (18% reduction)

both have IRR of 9.4%. ie: the toll IRR hasnt changed before and after the reduction.

possible upside due to increased volume, however, government actually still owes PLUS when FHR2 and Bukit Kayu Hitam toll terminated, in the RM200 millions. so its possible that it will be used to pay for this too.

The thing is after so many years the highway is already paid off! Why still need to collect tolls

If CAPEX is the same, IRR must drop if FCFF drops.

The first owner made a killing selling it off.

The later owners have not made their buck yet.

If no tolls, then don't complain when your EPF dividend is 2.5%. Not only EPF but a lot of unit trusts and insurance funds are also invested in toll companies. Why? They are assured of good profits and gives out good dividends. A lot of people also do not know that toll companies are one of the favorite counters for foreigners on our Bursa.

IRR is dependent on cash flow timing. it is all-in (includes capex, opex, excludes borrowing cost, dividends)
you can do it yourself on excel. just straight line it. the number wont run much.

The toll has operating expenses of RM1.3-2.9 bil a year (2019-2036 3%-5% inflation), and capex of RM0.3-0.4 bil a year to maintain the roads.

its not cheap. Toll is a must, or else taxpayers will pay, and EPF will pay.

- Datuk Seri Dr Wee Ka Siong

Yes. Look at the parameters involved.
If revenue is reduced by 18%, and capex and opex is maintained(no reason to be reduced), then IRR will surely reduce?

who wants to make money, terms can always renegotiate when you are losing money, ask for compensation

just siphon it off via maintenance

Thats because they dont allow PLUS to hike the toll

18% toll reduction is worth about 20 years of concession

When the first concession came, the toll rates was such that the toll will hike an average 2%-3% per annum for inflation and to give a modest IRR of 10%.

Since the government does NOT allow for the toll hike, the concession must be extended

18% toll reduction is worth +20 years of concession.
if you dont allow the toll to do the 3% rate hike, than every hike, the concession will be extended by 3-4 years!

IE: if you dont allow PLUS to do their toll rate hike for the sake of votes, than the concession will go practically forever. this is simple maths.

The government should have just let PLUS do their hikes to account for inflation and 10% IRR. Highway is risky, 10% IRR is NOT that high!

20 years extension bro.
more years of cash flow = higher IRR but its offset by the 18% reduction in toll



This post has been edited by Nachiino Etamay: Jan 17 2020, 09:40 AM

“I pay RM18 to resurface one square metre of my highway (Maju Expressway), everyone pays about that, (but) they (PLUS) pay about three times more,” he tells The Edge.

PLUS pays RM58 for resurfacing one square metre, according to Abu Sahid.
“Why do they pay that [high] price?
https://www.theedgemarkets.com/article/plus...says-abu-sahid#

Not because they are stupid but because they have layers and layers and layers, from PLUS, they give it to Propel (Projek Penyelenggaraan Lebuhraya Bhd), then to UEM Edgenta (Bhd), so many other companies (all within the UEM and Khazanah stable). By the time it goes to the guy who really does the job, there is just skin,” Abu Sahid says

En Abu da report MACC ke?

IRR is more sensitive to early years numbers I think.
As you stretch out too far, the effect is very much less.

Unless we are looking at EPF/Khaz IRR and not project IRR. That may be more impactful, yeah

Butthurt first, komplen later

Tak jual PLUS bodoh
16 Jan 2020
https://forum.lowyat.net/topic/4892946
https://forum.lowyat.net/topic/4892968

I was referring to the owners, EPF and Khazanah.
The rest is of couse Malaysian songlap.

No need to maintain? The money fall from the sky?

I think the issue is who is the individual who want to sell Plus to private company....?
this issue never happens during BN then suddenly during PH takeover got this issue...something very fishy here...
Anyway Plus is a "money-making machine", dont know why want to sell such valuable asset in the first place

Jual Complain.
Tak Jual pun Complain.

Apa lagi rakyat malaysia mau?????

Actually do you know what the purpose of road tax?

No toll but raise as much as road tax enough. Rich people own car will fund the road maintenance fee.

You sounds like after 18% reduction, they will have no enough allocation for maintenance.. Is that true?

I am not in favour of toll abolishment eventhough I am a frequent highway user. I am sure the allocations for maintenance has been factored for before the decision to reduce toll rate.As for whether they have overpaid the contractor or not , I can't comment as I am only an ordinary citizen and don't know the inside.

ROad tax was used to pay ROsmah bag

dude. ur road tax is just miniscule compared to cost of building highway.

if road tax was fully to fund infrastructure, the cost will be RM10-20 billion highway cost divided by car users, ie: A LOT

chap ayam tartar job mesti mau maintainance, that day i go Thailand their road nice good, but no tol

Car tax excise duties collect around the same amount each year

This.

Now is just a no win, zero sum situation. The cream has been shaved off back in 2011.

Status quo - user pays
Cancel contract - taxpayers pay compensation
Reduce toll price without extension - taxpayers pay compensation
Reduce toll price with extension - user pays

Ultimately, money that goes to plus' pocket remains the same, just who pays and when.

Nobody count the dividend paid by PLUS which translate to our EPF dividend?

If end concession, our EPF dividend might drop due to losing good return from PLUS. So, in the end same same.

When things is Free, it will be abused..

why is it FCFF and not FCFE?

Dont agree with your calculations though...when they calculate the IRR, they have factored in fee hike...now the operator was not allow to hike the fees...so their IRR is affected....

Anyway, the above is just estimates, need to compare with actual....

Babi, CAPEX, XIRR??
So complicated how h to counter...

Need wait LSS to instruct us what to do

Third owner can't wait to get in!!!

Agree that it should be FCFE or even DDM. And IRR should be calculate as equity IRR not project IRR, basically IRR to equity holders. The capital structure significantly impacts the IRR.

With the extension, PLUS' debts will likely need to be restructured as well, such that the IRR remains about the same from the extractable dividends.

Yeah

Opportunists are still trying to fleece off the taxpayers!

At least, now as EPF stakeholders, we can at least hope to enjoy some financial benefits from the business.

Because the capital structure is special
its leveraged more than 20 to 1.

Highways,tolls mechanisms, extension calculation mechanism generally priced via project IRR and not equity IRR. Its up to the equity holders to do funding, but project IRR is the one governed and must be calculated via independent toll CONsultants

Why? Got no other portfolio to invest anymore is it?

The contribution of these tolls to Kwsp is less than 2% of total profit
Source:https://www.kwsp.gov.my/-/epf-records-moderate-q3-2019-results-amidst-cooler-market-condition

Abolish tolls won't affect a lots. Let assume originally they can give 6% interest.. A reduction of this 2% means interest could be 5.88%.

Huge effects? Depends on how much savings in your EPF account

Tell me which portfolio in Malaysia that can guarantee good returns like toll companies?

Oil & gas as well as plantation sometimes gives good returns but they are susceptible to changes.

True
Well said

Ha ha ha ha ha ha EXACTLY!
Meanwhile cronies all dapat happy ending?

Naik public transport je la

Better use discount net cash flow to take into account time value of money

Better use discount net cash flow to take into account time value of money

I think just let it be...

Toll is one of gomen main income coffers, our epf and khazanah stable income generator

Cause every extension granted is $$KA-CHING$$ for everyone involved...

This is not something numbers can explained. I think PH in general looked at the numbers and think its possible. When they won and look at the contracts instead, holy cow, this is where it starts to get interesting. As usual, BN already laid down the web and if PH want to change, it is basically bailing out all those cronies from BN.

It sucks... but at least we know why things are so complicated and who are responsible for this mess in the first place. The initial figures looks nice but the dirt was hidden beyond multiple layers of unspeakable truth.

damn kronies still surviving
why palm oil co last time kena superprofit tax
toll co not kena ?!

u pay toll
u r paying your own epf dividen

epf & khazanah are breeding kronies
& inefficient cos
who bleed the rakyat

This post has been edited by brapa?: Jan 17 2020, 12:12 PM

people should not have to keep paying toll on PLUS, which had cost RM5.9 billion to build, since the concessionaire had already collected toll worth RM37.4 billion over the past three decades.

ask atuk, muhidin and etc
i am sure they know about the contract

The later owners are us, by way of Khazanah (government) and EPF.

So basically the toll has become a tax.

The original contract was massively lopsided and that's what led to massive profits by private companies. Right now whatever losses that are incurred by restructuring the deal will be felt by the people anyway in the way of lower returns for Khazanah and EPF.

Mahathir and his highway deals already fucked us many times over already... there's nothing to do with them now that will benefit the people.

The same deal with the IPPs, since all the IPPs have been bought up by 1MDB, so if they cancel the horrible deals or renegotiate the IPP contracts, its 1MDB (us, through the government) that will lose. I'm sure Najib who got us into that fucking mess by bailing out the IPPs through 1MDB towards the end of the IPP contracts will be the first to cry about government sabotage if the deals are renegotiated. We're fucked now, thanks to BN fucking things up for so many years with abandon. The people lose in every way.

You must be stupid.

Might as well let EPF running all the money making companies.


Stupid fck

Don't want to pay toll, take Route 1 la. NSE isn't the only way to get around.

My point is, if abolish, then EPF dividend drop, then people still complain PH sucks (remember TM share price drop, everyone complain).
PLUS should remain status quo because EPF affects more people than PLUS users.

I rather they focus on intracity toll (not all tolls have EPF/gov ownership) better as those not benefit general populations .

Don't forget PLUS still got 30Billion of sukuk debt need to redeem

Back when PLUS highway and other highway was build based on IRR 20%!

Well the people kept bn in power for 60 years and now when ph want to do the painful things needed to correct past bn mistakes, all cry mother father and kerajaen sepenggal. How to do anything like that? When bn ficked you all the first time, you didn't frick them back, so why complain now?

last time BN minister used to said so

and kena u whack like shit

When you sell a highway, you need to revalue your debt, equity and recalculate your capital structure.

The last transaction was last decade. so the capital structure is more reflective of now. It was transacted at high-single-digit-IRR which is standard for IRR now.

IRR during that time was 20%, because risk was soo high and loans was expensive. corporates were borrowing at 10%-15% cuz its soo risky.

Lol.
Not for tolled highways. User pays the full toll!
Why need the whole country to subsidize Klang valley residents and pay compensation to tollways?
Bn sign the lopsided agreements but no balls to follow it. Keep kicking the can down the road.
And people are so easily bribed and lalai.
No they want to cry mother father and kerajean sepnggal. Lol.

This post has been edited by dickybird: Jan 17 2020, 12:32 PM

Self entitled free toll fucks should just go fick themselves la.
No money but drive civic ketam then complain toll expensive.
Mcb

This post has been edited by dickybird: Jan 17 2020, 12:32 PM

Ya, they have to refinance and negotiate for lower financing rate over the years. If u look at WCE, the cost was RM6.6bil and given single digit IRR.

TBH the current arrangement is fine, profit channel back to Khazanah and EPF.

Reason I mentioned that the 1st owners made a big killing!

I understand, if memory serves, that the gomen guaranteed some of the loan taken out by these private companies.
What risk?

some =/= all.

if you are the equity, basically if your RM6 bil highway fails, u lose all your money. if traffic below projections, you lose all your money. if no one likes ur highway you lose all your money. your contractor suk and lari? you lose all your money. highway is suky business now. all for an IRR of 9%? jual burger IRR 400% bro

hindsight is 20/20, we in 2020 knows PLUS is a good investment. but the guy who had to build it, knows nothing about future demand for a future road which no one knows about.

this is not EQUITY GUARANTEE.

This post has been edited by Nachiino Etamay: Jan 17 2020, 02:37 PM

How many burgers you nak jual?
But having said that, highway concessions is not new, but only in Malaysia at the time.
Traffic count/growth projection is normally quite conservative and it showed!

i am not saying IRR 9%, but rather around 12% ish is already highly lucrative. 20% is actually outrageous.
The equity at the time is probably quite small since who the heck is UEM? Hence the loan guarantee requirement from the gomen.

Then u maintain the highway is it?

you can say its conservative because you are behind 20/20

at the point the decision needs to be made to construct the highway, SOMEONE needs to put half a billion or so equity and risk total capital loss. If his internal IRR is 15%, in 1980, this is worth RM134 billion today at his internal IRR. This is NOT an easy decision. sure. traffic can be higher than expected and get IRR 20%. but the highway can fail and i get nothing due to the insane gearing.

This is what im saying about risk and IRR's.

its only an easy decision in hindsight.

personally, i dont think they are making too much money. they took the risk, they did the project well, they designed the highway well, and they made money

stop thinking making money is songlap. the government could not and would not afford that highway. thats why they tap the capital market. And the capital market demands this returns for risk.

20 more years of toll

Lol 😂

The gearing risk is the government's, not the investor. That is the biggest risk, mitigated.

you all happy now, after 3 years sure sien already and same issue again ask to reduce further or abolish toll. ni short term happiness thing je

dude. if you gear up by 5x or 6x, your equity returns is 6x geared and more more sensitive to traffic loss

gearing is NOT at risk. this is because all debt for PLUS was guaranteed by the government and taxpayers. Basically, if PLUS failed and the equity goes bancrupt, the government must take-over all debt including government debt. hence, the taxpayers pay for the toll (which should be the case, taxpayers should have made highways, but they dont earn enough)

Inflation will play the magic

Yeah agreed.

Also, I think we all forget that PLUS was privatised in 2010 which would explain the heightened gearing that is nevertheless backed by cash flow.

Come on, no point keep talking cxck.

Just abolish all the cxbai tolls.
Tiap tiap hari, start kereta, toll sini toll sana. Kns.

We voted you, you have to fullfill your promises.
Not twist & turn.

Rakyat nowsaday ald smart. Dont play a fool on Rakyat.

*You always can check with Mr.Tony's youtube, how to abolish the tolls.

The twenty more years is till year 2058.
Malaysia got flying cars already by then and later be trolled again not for sales.

How about change manefisto abolishing road tax instead?