Kl Tower Reopening Concessions Fosters Competition Says Ministry

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The Communications Ministry says the government has opened proposals to run the iconic Kuala Lumpur Tower in order to foster competition.
In a list of “frequently asked questions” issued last night, it said the government has the discretion to do so even if the existing concessionaire has held the concession for a long time.
This can be done because most concessions are awarded for a finite period, such as 10, 15, or 30 years.
“When a concession period ends, the government needs to reopen offers so other companies have the opportunity to compete. It ensures transparency and prevents a prolonged monopoly by one party.
“(It) also gives the opportunity for a more competent company to take over management,” it said.
The Communications Ministry buildingThe government stands to gain from this through lower prices, improved technology, better service, and innovations in management and operations, it said.
‘Hydroshoppe fully aware of takeover date’
It said the former concessionaire, Menara Kuala Lumpur Sdn Bhd (MKLSB), had operated KL Tower as a wholly owned subsidiary of Telekom Malaysia (TM) since 1996. TM then sold all of its stake in MKLSB to Hydroshoppe Sdn Bhd in December 2022.
MKLSB’s contract to operate and manage the landmark under the fifth interim extension agreement ended yesterday, the ministry said.
The new concessionaire, LSH Service Masters Sdn Bhd (LSHSM), is meant to take over today and operate the concession for the next 20 years.
The company is a special purpose vehicle that is 70 percent owned by LSH Best Builders Sdn Bhd and 30 percent by Service Master (M) Sdn Bhd.
“MKLSB, which is owned by Hydroshoppe, was informed about the effective date for the KL Tower operation and management takeover by LSHSM since they signed the fifth interim extension agreement with the government on July 1, 2024,” the ministry said.
It added that LSHSM was selected through a request for proposal (a type of open tender) approved by the cabinet on Dec 13, 2023.
A total of five companies responded to the RFP, including MKLSB.
‘Workers won’t be affected’
The ministry assured that the takeover would not affect KL Tower’s operations or its workers.
It said that during negotiations with the new concessionaire, LSHSM has outlined terms that would ensure KL Tower continues to operate as usual.
MKLSB’s existing employees at KL Tower have also been given a government guarantee that they will be offered jobs with the new management on terms that will be no less favourable than their current position.
The ministry said this had been written into the concession agreement between the government and LSHSM.
The FAQ came amid a legal dispute where Hydroshoppe and MKLSB had sued the government and the new concessionaire for over RM1 billion.
It claimed the government had wrongfully terminated their concession agreement in November 2022.
Lim Seong Hai Capital Berhad, the parent company of LSH Best Builders, said the claims have no merit and they have engaged a lawyer to prepare a full defence against the claims.
Hydroshoppe executives during a late-night press conference on March 31Last night, Hydroshoppe and MKLSB convened a late-night press conference claiming that they may be forcibly evicted at the stroke of midnight, and then said this was averted due to the subsequent media attention.
The Communications Ministry has assured that the concession handover will be handled according to the law. - Mkini

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