Asas Serba is proposing to take all of the nation’s 23 toll road concessions private for RM50 billion and in exchange is promising to give a 20 per cent discount on toll rates as well as no further rate increases.

But the unsolicited proposal has not seen much traction within the Najib administration, government sources say.

When contacted, Asas Serba director Ibrahim Bidin didn’t deny that it aims to present their case before the Cabinet at its weekly Wednesday meeting. Such papers are normally submitted through the Finance Ministry or the Economic Planning Unit within the Prime Minister’s Department.

“No confirmation yet,” he told The Malaysian Insider.

In contrast to Asas Serba’s RM50 billion bid, government think tank Pemandu, as part of its subsidy rationalisation exercise, estimated that it will cost the government RM383 billion to nationalise the 23 toll concessions.

Asked about the difference between Pemandu and Asas Serba estimates, Bidin said that Pemandu’s figure appeared high but declined to elaborate as he hadn’t seen how it was derived.

Ibrahim said that Asas Serba has yet to appoint a financial advisor but has engaged a strategic consultant.

“The moment the government says that they want to see the final proposal then we will appoint a merchant banker,” he said. “I heard that the government is favourable to us.”

Local research house OSK Research said in a report that the Asas Serba bid to acquire toll concessions from a combination of public and private sector entities is complex and gaining approval from shareholders will be “daunting”.

Asas Serba has not approached the toll concessionaires directly but Ibrahim said that they will do so if the government gives them the “green light”.

For now, the company has focused its attention on government-controlled PLUS Highways which rakes in 61 per cent of the toll road revenue in the country.

Critics of Asas Serba’s bid, however, have questioned the company’s capability to raise RM50 billion in funds via dividend bonds, given that it is a little known entity, although some of its executives have experience in the toll concession business.

There has also been concern that Asas Serba’s proposal could potentially become a repeat of the Malaysia Airlines saga when a controlling stake in the national carrier was sold to businessman Tan Sri Tajuddin Ramli who later had to be bailed out by the government.

Ibrahim denied that the Asas Serba’s bid risks going the way of Malaysia Airlines.

“These are not new expressways but have known revenue streams,” he said, without explaining the difference with the flag carrier.

He stressed that under the Asas Serba proposal which promises no further toll rate increases, the government stands to save as much as RM114 billion in subsidies between 2010 until 2038 while consumers collectively stood to save as much as RM20 billion from the lower toll charges.

The government currently spends hundreds of millions in subsidies to compensate toll concessionaires for not raising toll rates as per their concession agreements.

Pemandu as part of its subsidy rationalistion proposal is recommending that rates be allowed to rise for toll roads that do not have alternatives in order to save the government as much as RM3.7 billion in subsidies over the next five years.