MALAYSIA'S ambitious privatisation programme has played an integral role in helping the country's economy become one of the most vibrant in Southeast Asia. Among the country's most prominent projects is the 890-kilometre North-South Highway from Bukit Kayu Hitam on the Keden-Thailand border to Johor Baru, which opened in February, more than a year ahead of its scheduled completion. The M$5.9 billion (HK$16.46 billion) project has been heralded by the Malaysian Government as yet another example of the privatisation programme's success in recent years and a boost for industrial growth. Upon its completion, Deputy Prime Minister Datuk Seri Anwar Ibrahim said: ''This has marked the beginning of a new chapter to enable [us] to strive more actively in the privatisation programmes for success, whether in the development of highways or otherprojects.'' However, the North-South Highway did not come without its troubles as the final cost was $2.5 billion, or 75 per cent, above original estimates. The hefty cost over-run was blamed on inflation, unplanned additional work and early implementation of planned enhancements. Among the most promising areas along the North-South Highway is the stretch between Kuala Lumpur and Tanjung Malim on the Perak border. Large property developers such as Larut Consolidated Bhd and Land and General Bhd plan to develop sites along the highway. Property consultants said the stretch of highway would soon take precedence over the old road passing through Ulu Yam and Kuala Kubu Baru. The North-South Highway is also expected to boost Malaysia's tourism sector by attracting visitors from Thailand, Singapore and Burma. The highway was built by Project Lebuhraya Utara-Selata Bhd (PLUS), which took over the construction in 1988 and became responsible for its design, financing, construction, maintenance and operation. In return, PLUS received a concession to collect tolls until 2018 when it will hand the highway back to the Government. The leasing arrangement involving the North-South Highway has also been implemented for large and strategic projects, such as Port Klang and Malaysia Airport Ltd. Among the other major infrastructure projects privatised were the Kuala Lumpur Light Rail Transit system, ports in Bintulu and Johor, and postal and telecommunications services. PLUS is owned by Kuala Lumpur-listed hotel group Faber Group Bhd and United Engineers (Malaysia) Bhd. Both firms fall under the Renong Group umbrella, which includes many interests formerly controlled by the United Malays National Organisation, Malaysia's leading political party. Renong has expressed interest in listing PLUS on the Kuala Lumpur Stock Exchange next year. PLUS is expected to spend between 10 and 15 per cent of tolls collected on maintenance and the rest to service loans. It will now take a little more than seven hours to travel the entire length of the highway by car. The trip will cost 7.5 Malaysian cents a kilometre for a one way north-south trip. Both United Engineers and Faber have seen their stocks climb due to interest in the North-South Highway and the Malaysian stock market. In the past 14 months, United Engineers has gained 272.6 per cent from $3.22 to $12, while Faber has jumped 385 per cent from 87 cents to $4.22. Last month, Faber denied reports it was negotiating to sell its 50 per cent stake in PLUS following reports that potential suitors might be property developer General Corp. or DNP Holdings Bhd, a developer and garment manufacturer.
