Zecon loses cash cow

  • Corporate News
  • Monday, 30 Nov 2015

Toll-free: Toll collection to be abolished by December at the Tun Salahuddin Bridge.

Its toll bridge over Sarawak River to be toll-free by December

KUCHING: Construction firm Zecon Bhd will be left without a “cash cow”, following the abolition of toll collection at the Tun Salahuddin toll bridge here soon.

Last week, Sarawak Chief Minister Tan Sri Adenan Satem announced that the Tun Salahuddin toll bridge across Sarawak River, which connects city south and city north, would be toll-free by next month.

The state government had earlier this year abolished toll collections at Lanang Bridge in Sibu and Asean Bridge that links Baram in northern Sarawak with Brunei Darusalam.

Sarawak also does not impose toll on the Pan Borneo Highway or its other urban roads.

Adenan had pointed out that the abolition of all tolls in Sarawak would reduce the people’s cost of living which had been increasing.

Tun Salahuddin Bridge, which is the sole toll bridge in southern Sarawak, was built for RM136mil. Zecon’s wholly-owned subsidiary Zecon Toll Concessioniare Sdn Bhd (ZTC) commenced toll collections on Oct 1, 2003 under a 33-year concession period, with an optional extension of 19 years.

ZTC general manager Brandon Goh Mun Han said Zecon had yet to receive any official notifications from the state authorities on the actual date to abolish toll collection at the bridge.

“We are still waiting for the black and white from the state government,” he told StarBiz recently.

On compensation to Zecon for giving up toll collection, Goh said negotiations with state government officials, including those from the Infrastructure and Communication Ministry and Public Works Department, were ongoing but “nothing has been finalised”.

“We have our valuations and the state government has its own valuations. No figure on the compensation has been discussed or determined,” he added.

According to Goh, an average of some 30,850 vehicles, including motorbikes, use the Tun Salahuddin toll bridge a day, generating a monthly revenue of about RM1.33mil.

For financial year to June 30, 2015, the toll bridge contributed RM15.6mil to Zecon’s group revenue of RM208mil against RM15.2mil and RM175mil, respectively, a year earlier.

The projected toll collection for the current financial year is RM15.9mil. Toll rates were revised for the first time in January 2012, with cars/taxies paying RM1.60 (previously RM1.50), vans/pick-ups RM2.20 (RM2), trucks/buses RM3.30 (RM3). Motorcylists pay the same rate of 50 sen.

Under the concession agreement, the concessionaire has the right to revise toll rates every three years.

“Effective Dec 1, there will be no reload service and sale of new toll cards. However, the existing toll cards with valid balances are still usable at all cash and card lanes.

“This move is to minimise the toll card balance so as to ease the process of refund upon the closure of the toll. All card balances are refundable,” added Goh.

The toll bridge significantly cuts down the travelling time between particularly the Pending-Bintawa area on the south bank and Demak in the north bank and eases traffic flow in the city centre.

Zecon also owns a 25.5-year concession for the proposed specialist children’s hospital at Universiti Kebangsaan Malaysia in Kuala Lumpur. The construction of the 243-bed hospital project is currently in its second phase.

According to Zecon managing director Datuk Zainal Abidin Ahmad, the hospital is expected to be completed in 2018 and its subsidiary, Zecon Medicare Sdn Bhd, would then receive annual lease rentals of some RM145.9mil over the concession period.

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