Malaysia mulling cuts in road toll rates - sources

By Razak Ahmad

KUALA LUMPUR, July 10 (Reuters) - Malaysia's government is mulling a proposal to cut road toll rates to ease growing public complaints about rising charges, sources with direct knowledge of the matter said.

The proposal would be taken to the cabinet for approval and would be announced by Prime Minister Najib Razak, said one source.

Malaysia has 22 highway concessionaires, three of them listed, including state-controlled PLUS Expressways (PLUE.KL), which operates the North-South expressway, the country's longest highway that runs the length of the Malaysian peninsula.

The others are Lingkaran Trans Kota Holdings Bhd or Litrak (LTKH.KL) which is controlled by Malaysian builder Gamuda Bhd (GAMU.KL); and Malaysian builder IJM Corp Bhd (IJMS.KL).

Popular anger has increased in recent years over scheduled toll charges -- stipulated in the concessionaire's agreements -- and came to a head last year as inflation rose due to high food and oil prices.

Inflation last year hit a near-27 year high of 8.5 percent but has since subsided to 2.4. percent.

The government has declassified the toll agreements for public viewing and said it would revisit the concession agreements.

"The government also undertook a study following complaints of increasing toll charges and the initial finding is that it would be too cost prohibitive to mount a government takeover the companies," the source told Reuters on Friday.

The source said the proposal entails discounts for heavy users of toll roads in cities and major towns.

It could be modelled on a loyalty programme now being offered by Litrak that offers a 20 percent rebate for customers who pay RM200 ($56) or more a month.

The proposal would offer discounts to users who paid a toll five or more times a day regardless of the daily amount.

The source said, however, it was uncertain if concessionaires would be asked to absorb the cost of the discounts or whether they would be compensated.

An aide to Najib said that the prime minister had spoken about the need to study the matter but did not have further details. (Editing by Alex Richardson)