32 concession companies may build their own free-flow lanes at toll plazas

A total of 32 highway toll concession companies may finance the construction of free-flow lanes at toll plazas, a move that could save them more than RM1 billion.

According to a report by Free Malaysia Today (FMT), citing sources familiar with the matter, in 2023, concession companies opposed the government’s plan to directly award the Multi-Lane Free Flow (MLFF) project to a private company for all highways in the country.

Under the MLFF system, all highway entry and exit points will be converted into barrier-free lanes to reduce congestion and facilitate traffic flow.

The concession companies, which were reportedly not consulted about the project, would have had to bear costs amounting to RM3.46 billion for the initiative.

However, the source, who declined to be named, said the concession companies could save at least 30% of the total cost if they self-finance the initiative.

As an initial step, the source stated that the majority of highway operators would introduce a single free-flow lane to test the system and implement the MLFF system after resolving any issues that might arise during the trial period.

During the single-lane trial, the barriers at toll plazas will remain but will open more quickly compared to the current radio frequency identification (RFID) lanes, where drivers need to slow down before the barrier lifts.

The source explained that the barriers are necessary to prevent revenue leakage caused by drivers who evade toll payments, as well as issues like invalid vehicle registration plates and vehicles tailgating, which could impact toll collection revenue.

“For now, the concession companies will work with the Road Transport Department (JPJ) to identify ways to quickly track violators, as such leakage could affect their ability to repay debts,” the source said.

The concession companies will independently decide on the company to be appointed for the free-flow toll collection system.

“The concession holders are coordinating the implementation of this as quickly as possible due to the urgency.

“Most importantly, this approach will result in significant cost savings for the companies compared to the government awarding the contract to a selected company for a 20-year concession,” the source added.

In 2023, the Association of Highway Concession Companies of Malaysia (PSKLM) sent a letter to the government expressing their opposition to the agreement to offer the concession to a third party instead of the existing concession holders.

PSKLM stated that such a move would harm highway companies, which already have substantial bank loans to settle, and noted that they would only begin seeing profits 12 to 15 years after signing the concession agreement.