The Mahathir package
By Lim Sue Goan, MySinChew
As it is better to just get it over with, rather than prolong the agony, the government must cut off from the failed policies implemented during the Mahathir administration and pursue its own way.
Former Prime Minister Tun Dr Mahathir Mohamad is strongly opposed to the idea of highway nationalisation.
However, PLUS Expressways Bhd has received approval from its shareholders on a RM23bil takeover bid by major shareholders United Engineers Malaysia (UEM) and the Employees Provident Fund (EPF). This would result in the delisting of PLUS while paving the path for the government to solve the problem of increasing toll charges.
The UEM group is a wholly-owned subsidiary of Khazanah Nasional Berhad, and the EPF is one of the government investment arms. It will be much more convenient for them to discuss how to modify the contract behind closed doors. Also, the government would no longer have to worry about the increase in toll charges every three years. It is a big headache as raising charges might cause public discontent, while maintaining charges requires the government to pay heavy compensation.
Although Mahathir has championed and defended the privatisation policy implemented during his term of office, it is undeniable that the country and the people are still paying the price for his arbitrary and wrong decisions, and the government does not know how to deal with the problems created and left behind by him.
Privatisation was a trend during the 1980s, with Japan being a good example of a country which had achieved great success with it.
However, I believe that no privatisation policy in the world is like that in Malaysia, where the contracts often benefit the private companies instead of the government.
For example, the contract stated that the government must pay compensation if the traffic flow does not reach a certain volume. The government is the loan guarantor of the project, and also provides low-interest loans. If a project fails, the government will have to take over the company involved. Some examples are Perwaja Steel Sdn Bhd, Indah Water Konsortium Sdn Bhd and the Light Railway Transit (LRT) companies. So far, the government has spent RM11 billion to bail out seven privatisation companies which were mismanaged and had financial difficulties.
According to Mahathir, there is no free lunch in the world, and thus, users have to pay. So far, however, no officer has admitted liability and responsibility for the financial fiasco, but the government has used national resources to clean up the mess.
If the projects succeed, the entrepreneurs make big money; if the projects fail, they just leave them to the government. Who would support such kind of privatisation arangement?
In comparison, Prime Minister Datuk Seri Najib Razak’s Economic Transformation Programme (ETP) is more pragmatic, and beneficial to the country and the people.
The Performance Management and Delivery Unit (Pemandu) in the Prime Minister’s Department is responsible to draw up workable development and business plans and members of the private sector are encouraged to invest. Whether the plans succeed or not, the private companies, instead of the government, would have to take the responsibility.
Another burden of the country is the domestic vehicle programme. The national car maker is still unable to drive smoothly on its own, and needs to be supported by the people even it has been established for almost 30 years.
If Mahathir had not promoted nationalism and provided incentives to attract foreign investors to set up the local vehicle assembly plants, Thailand would not have become the vehicle manufacturing centre of the region today.
