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?