KUALA LUMPUR, MALAYSIA - MALAYSIA plans to review all highway concessions in a move that could result in lower toll rates.

Works Minister Mohamad Zin Mohamed said yesterday the move was part of the government's pledge to tackle rising living costs, following higher food and fuel prices.

He told reporters at Parliament House that he would call for a detailed study to be carried out before reviewing the agreements with 22 toll road concessionaires.

The country's biggest toll road operator is state-controlled Plus Expressways, which operates the highway that runs the entire length of the Malaysian peninsula.

He said the study would be completed within three months. Asked if the findings of the feasibility study could lead to lower toll rates, he said: 'It is one of the possibilities.'

Some of the important factors to be considered in the study were the traffic volume forecast, toll rates and the period of the concession, he said.

'We will compare the toll collections and maintenance and operation costs as well as 'heavy' maintenance costs,' he said.

Under toll concession agreements that critics say favour operators, the government has to reimburse operators if traffic volumes and revenues fall short of projections.

Asked whether the government had paid compensation to any concessionaire as the toll rates had not been raised this year, Datuk Mohamad Zin said no payment had been made as they were reviewing the concessions.

Most of the highways were approved in the 1990s by the administration of then prime minister Mahathir Mohamad which made privatisation and mega-projects one of its hallmarks.

Datuk Mohamad Zin also said the 22 concessionaires had cumulatively collected RM27.6 billion (S$11.8 billion) in tolls since privatisation. Their cumulative profit was RM3.5 billion.

Meanwhile, Second Finance Minister Nor Mohamed Yakcop says the government is examining ways of restructuring its soaring subsidies.

Malaysia currently subsidises fuel prices, making prices at the pump among Asia's lowest, and keeps a cap on prices of essential goods such as bread, sugar and chicken.

'We're looking at ways of reorganising the whole subsidy,' he told reporters. 'It is RM45 billion and rising.'

After Malaysia's ruling coalition suffered its worst poll setback in the March general election, the government promised to revamp a complex system of food and fuel subsidies to make sure the country's most needy citizens benefit.

Asked about a time frame for revamping subsidies, Tan Sri Nor Mohamed gave no details, saying only: 'It's a work in progress. We are mindful of the need for the subsidy scheme to be sharp.'

REUTERS, THE STAR/ASIA NEWS NETWORK