KUALA LUMPUR (Nov 4): The traffic volume at MRCB Lingkaran Selatan Berhad’s 8.62-km Eastern Dispersal Link (EDL) is expected to be negatively impacted by Malaysia’s move to impose a new RM20 fee on all foreign registered vehicles entering the country, effective Nov 1, 2016.

RAM Ratings reports any deterioration in traffic in the immediate term will likely lead to a wider mismatch between the company’s annual cash generating ability and its annual debt payments.

In RAM’s latest sukuk’s rating announcement on Oct 19, 2016, they highlighted that the rating would be downgraded in the coming months, particularly if buyout offers do not materialise or if the company fails to make headway in its refinancing plans.

Since tolling began on the EDL on Aug 1, 2014, daily toll charges have increased 6-fold (from RM6 to RM36) for cars traversing the causeway. It is believed that this move by the Malaysian government and any move by the Singapore government to match the fee, will result in the ballooning of daily cost of travel (by car) across the causeway.

With the availability of cheaper alternative public transportation such as KTM Berhad’s Shuttle Tebrau train and the Causeway Link Bus, it is anticipated that there will be increased migration of daily commuters to this mode of transport.

Following the commencement of tolling, EDL’s traffic performance has remained largely volatile, with average daily traffic coming in at 46,808 vehicles in August 2014, and hovering at 41,347 (a decrease of 11.7%) vehicles in September 2016.