Published on October 3rd, 2019 | by Daniel Sherman Fernandez0
Has PLUS been using the media to get a higher buy value from RRJ?
Charging more toll for BMW and Benz owners seems very unfair.
The last 24 hours we have read and seen edgemarkets.com and numerous business and mainstream news channels sharing the big news of the big financial bid made to PLUS Malaysia Berhad by two Malaysian brothers Richard Ong and Charles Ong who through their investment company RRJ Capital has made a RM3 billion cash offer to buy out PLUS Malaysia Berhad.
RRJ Capital has made a statement that if the buy-out is successful they will reduce toll rates by 20% across the board and introduce numerous new technologies to ‘smarten’ the 957 kilometer highway that PLUS currently runs.
In recent months, PLUS Malaysia Berhad has taken a very active media role in promoting itself and its management to the Malaysian media with dozens of events, press releases and even corporate events to raise its media profile and get more consumer attention.
We are now seeing all the previous events and press releases as a mere public relations activity to get maximum media attention to raise its profile to probably get a higher offer price from RRJ Capital and allow its management and shareholders a generous payout.
This means that PLUS’s recent Hari Raya community video ‘Tumpang” (that won an award which was probably paid for in advance) and community engaging events held these past few months have probably been nothing but a ‘push’ to get RRJ Capital to make a higher bid for the biggest toll highway company in Malaysia.
RRJ Capital in an interview has mentioned that they have also plans to engage traffic and engineering consultants from Massachusetts Institute of Technology and the University of California at Berkeley to review the entire operations of PLUS Malaysia Berhad.
RRJ Capital added, “We would introduce the latest technologies and systems, which are currently being used in Japan, Europe and the US. Electronic toll collection systems, such as EZPASS in the US, which would not require any toll booths will be included.
To reduce traffic congestion, we would study live traffic systems using big data and artificial intelligence (AI), implement differential pricing systems for peak and non-peak hours, set up special fast lanes for vehicles with more than two or three passengers and a dual electronic pricing system”
We however find this last statement below by RRJ Capital to be highly controversial,
“higher toll rates for luxury cars such as Mercedes-Benz and BMW and lower for non-luxury cars,” says the document”.
Targeting luxury car brands to to charged higher toll sounds like a ploy to get the lower income drivers to take the side of RRJ Capital in this PLUS buy-out and it will definitely never happen as there are many lower income Malaysian and retired Malaysians driving old BMW’s and Mercedes-Benz’s that cost less that a new Perodua Axia and Proton Saga.