THE dispute over a 1.8-acre land is further delaying the completion of the IJM Corp Bhd-backed West Coast Expressway.
The 233km-expressway, which is 96% constructed, is now expected to be fully ready only by the end of next year.
This is around the same time WCE Holdings Bhd is scheduled to begin the repayment of its loans.
WCE is the owner and concessionaire of the West Coast Expressway.
IJM owns a 28.2% stake in WCE. Malaysia’s 18th richest person according to Forbes, Tan Sri Surin Upatkoon, holds a 27.5% stake in the group.
Upon full completion, WCE’s toll collection is forecast to double from its average daily value of RM400,000-RM500,000 currently, WCE chief executive officer Lyndon Alfred Felix tells StarBiz 7.
In the financial year ended March 31, 2025 (FY25), the company’s annual toll collection more than doubled to RM125.2mil, with eight of its 11 sections open to the public.
Coupled with construction-related revenue, WCE’s overall topline in FY25 was recorded at RM629.1mil.
While the company remains loss-making on a net basis, it has turned operationally profitable.
Felix expects WCE to continue record operational profits moving forward.
“We don’t see any major surprises. We also expect to turn cash-flow positive upon full completion of the project.
“This means our toll collections will be able to cover our interest costs and operational expenses.”
“We have been serving our interest costs despite the project delay and we have not defaulted on them before,” says Felix.
In FY25, interest or finance costs of WCE were recorded at RM214.3mil, notably higher than the operational profit of RM80mil.
As per accounting standards, WCE can no longer capitalise the interest costs incurred for the completed sections of its expressway.
Currently, only three sections are yet to be completed and opened to the public.
Section 3-Sri Andalas, Klang is 93% completed but progress has been delayed after previous landowners of 19 families refused to vacate a 1.8-acre land in Kampung Jawa.
This was despite the said land being acquired by the federal government under the Land Acquisition Act 1960 and 75% of the compensation amount of RM9.8mil already disbursed as early as in September 2023.
Felix says that the law requires the payment of 75% of the compensation to allow landowners to move to a new place.
This, however, does not prevent the landowners and the developer from contesting the land acquisition price, even after the 75% payment is disbursed.
At the moment, both WCE and the landowners are contesting the compensation in court. The landowners’ stay order was rejected earlier in April.
“The court proceedings only determine the final compensation amount and do not affect the government’s right to proceed with possession and development.
“There are eight lots acquired in the area for our project and this is the only lot where we face such difficulty,” he says.
WCE is optimistic that with the full support of the federal and state government, this matter will be resolved soon.
Without the completion of Section 3, a full opening of Section 4 is also not possible. The section, which is 99% completed, is key as it connects West Coast Expressway to the Federal Highway.
Felix, however, says that WCE is exploring partial opening of Section 4 by end-2025 and is currently in talks with the authorities.
As for Section 7-Tanjung Karang, issues that caused previous delays have been solved. Construction will begin once soil consolidation has ended, allowing the soil ready for construction.
Section 7 is currently 80% completed. The section is key to bringing long-haul traffic into the West Coast Expressway as it connects the Selangor stretch with Perak’s.
Amid multiple delays in the past, the land acquisition cost for the West Coast Expressway has ballooned to RM2.3bil from just RM1bil forecast initially.
This has pushed the total project cost to RM8.26bil, of which equity portion is 24% of funding or RM1.97bil.
The remaining amount is funded by debt, mainly comprising a Government Support Loan of RM2.24bil; an additional government’s loan through Reimbursable Land Cost Financing of up to RM400mil to part-finance the land acquisition cost; syndicated term loans from licensed financial institutions of RM1.5mil and the issuance of debt securities via a rated sukuk of RM1bil.
In addition to these, WCE also secured a RM1.15bil term loan facility from Bank Pembangunan, which was announced in April.
“The new term loan will be sufficient to meet all our needs. After this, we will no longer require additional funding to run,” says Felix.
WCE’s latest reported gearing level stood at 4.58 times as of March 31. This, however, does not include the Bank Pembangunan loan.
With the full completion only slated for the end of 2026 due to issues that Felix says were “out of his control”, WCE is looking to restructure its concession agreement and refinance its borrowings.
Both restructuring and refinancing will likely take place in the second half of 2026.
“On refinancing, we will be talking to our lenders to stretch the repayment period in line with the new completion date, and potentially to get better rates for our borrowings.
“Our success in bringing West Coast Expressway’s completion to 96% so far and the fact that we have not defaulted on our interest payments show our commitment, and the lenders know this.
“Therefore, we are hoping for a good refinancing.”
As for the restructuring, Felix points out that WCE plans to talk to the government on the “broad terms of the concession to restore West Coast Expressway’s economic viability.”
Felix stops short of saying whether this will involve a change in toll rates or a longer concession period.