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Friday, October 30, 2015

Re: SPRINT Toll increase

Update on SPRINT Sdn Bhd  toll increase

SPRINT Sdn Bhd convened a special board meeting on 27th October 2015 to discuss the increase of toll rates which had already been implemented pursuant to a letter from Lembaga Lebuhraya Malaysia ( LLM) dated 6th October 2015. The meeting was convened at the request of the Menteri Besar of Selangor YAB Azmin Ali.

At the meeting which was attended by the Chairman of SPRINT Ir Haji Yusoff bin Daud, director Dato' Hj Azmi bin Mat Nor and myself, the SPRINT management presented the financial outlook for the company comparing the numbers with and without the toll increase.  What the numbers showed was that the Federal government was stopping the previous annual payment of about 90 million ringgit of compensation paid to SPRINT pursuant to the concession agreement which would now be collected from the highway users through increased toll rates.

I put on record the objection of the Selangor State Government, who is the majority shareholder of Kumpulan Perangsang Bhd who I represent on the SPRINT board, to the toll increase.  The position of the Selangor State Government is that given the current economic climate, a responsible government would manage the situation differently ie by maintaining the current toll rates and renegotiating the terms of the concession agreement in respect of the compensation payments.

Our objection could not change the final position taken by the board and management of SPRINT by virtue of the fact that Kumpulan Perangsang is only a minority shareholder holding only 20 percent of the shares of SPRINT which were invested during the time of the previous BN government in 1999. At that time Perangsang invested about 132 million ringgit in SPRINT. Since 1999 to date, no dividend returns have been paid to Perangsang.  No toll increases have been implement from 2001until the recent increase a few weeks ago.

By reason of the fact that a major policy decision has been taken which I am in principle opposed to, I am reviewing my position as a member of the board of directors of SPRINT.  I will consult with the other members of the board of Perangsang and also the Menteri Besar of Selangor before I make a decision.

Sivarasa Rasiah
30th October 2015

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