Seven failed privatised projects, RM11b bailout
Malaysiakini.com
Dec 13, 2006
Beh Lih Yi

A staggering RM11 billion - that’s what the government has spent over the years to bail out debt-ridden companies behind seven failed privatised projects, the Dewan Rakyat was told today.

Topping the list were the two light-rail transit (LRT) service providers Putra and Star, followed by national carrier Malaysia Airlines.

The Seremban-Port Dickson highway, Kuching’s new prison, national sewerage system and a Muslim food and consumption research unit all required a government takeover as well.

Deputy Minister in the Prime Minister’s Department, Abdul Rahman Suliman, revealed this in a reply to Ismail Sabri Yaakob (BN-Bera) during Question session today.

Elaborating, Abdul Rahman said that, in the majority of these cases, there was a full takeover in terms of equity ownership and administration of the companies.

However, in the case of the Kuching prison project, the Public Works Department took over directly.

Despite the enormous cost, Abdul Rahman claimed that the privatisation policy “has been largely successful”.

“Since the privatisation policy was implemented in 1983, a total of 490 projects have been privatised successfully,” he said.

To a supplementary question from Lau Yeng Peng (BN-Puchong), the deputy minister said the failures in the seven projects have enabled the government to gain “vast experience”.

However, he said the government will ensure the viability of privatised projects under the Ninth Malaysia Plan before these are carried out.

Over the years, opposition leaders and foreign investors have criticised the policy as promoting crony capitalism and for being the cause of a widening income-divide.

The privatisation policy was started under the administration of then premier Dr Mahathir Mohamad, with large infrastructure projects being farmed out to favoured private companies.

However, some encountered spectacular failure and were subsequently re-nationalised.

Merger proposal questioned

On another matter, Ahmad Zainuddin Omar (BN-Larut) was heckled when he asked Abdul Rahman a supplementary question about the proposed merger of two newspaper organisations.

Ahmad Zainuddin, the acting Backbenchers Club chief, wanted to know the rationale for - and if consensus has been reached - over the proposed merger of New Straits Times Press Bhd and Utusan Melayu Bhd. 

At this juncture, several backbenchers were heard questioning why the Larut MP was asking the question when the merger has yet to be confirmed.

Mohamed Aziz (BN-Sri Gading) said: “We disagreed with the merger, why ask about the merger?”, while Mohd Said Yusof (BN-Jasin, left) remarked “It (Utusan Melayu) is a Malay asset”.

Ahmad Zainuddin did not back down, but asked whether the grassroots views have been taken into consideration over the proposal.

The deputy minister said he could not answer the question as the two groups are private companies and this was not a question of privatisation.

However, he said government-owned companies will have to take into consideration their social obligations, not just profit motives, in making decisions.The Dewan Rakyat adjourned sine die today.

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