PETALING JAYA: Kumpulan Europlus Bhd’s (KEuro) 64.2%-owned subsidiary West Coast Expressway Sdn Bhd (WCE) has obtained the Government’s nod to build a 316km highway between Banting, Selangor and Taiping, Perak at an estimated cost of RM7.07bil.

KEuro told Bursa Malaysia in a filing that it had received an approval letter from the Public Private Partnership Unit of the Prime Minister’s Department for the project, which comes with a 60-year concession.

A major portion, or 224km, of the highway will be tolled, while 92km will be toll-free. The project will be operated on a build-operate-transfer model.

To enhance the viability of the project, KEuro said the Government would extend to it a support loan of RM2.24bil, commencing in 2013 at an interest rate of 4% a year, and an interest subsidy of up to 3% from commercial loans for a period of 22 years.

The terms of the loan and interest subsidy would be finalised by WCE with the Finance Ministry, the company said.

KEuro said toll revenue in excess of an agreed traffic volume would be shared on a 70:30 basis between the Government and WCE until the full settlement of the loan, after which the ratio would be adjusted to 30:70.

The company said the land acquisition cost of up to RM980mil would be borne by the Government, while construction works would be implemented by WCE through open tender.

Souce : Star Property