RM8 billion bailout: A Borneo perspective
What do the people of Sarawak and Sabah think of the federal government throwing so much money to save Malaysia Airlines and its outgoing executive chairman Tajudin Ramli and the light rail transit companies in the Klang Valley area?
Firstly, it is interesting to note that both have one thing in common - they deal with public transportation, which is perhaps principally the reason the government has been forced to step in, even though it means digging deep into the pockets to find the money to do so. The cost to taxpayers and the country in these bailouts is close to RM8 billion which can in fact help to build tens of thousands of houses for the country's poor.
Secondly, it is not necessarily an indication that the policy on privatisation has failed, but rather the wrong choices (of people) to handle privatisation have been made. It was a big mistake to choose someone who had to rely entirely on borrowed money at such the high cost to take over an airline when he had little, or no, experience.
It's one thing to be willing to work hard and quite another to know what exactly needs to be done. Virgin Airlines' Richard Branson learned the hard way, he stumbled but picked up again, and that explains where he is today, a successful entrepreneur who learned without much help from others but on his own.
Finance Minister Daim Zainuddin is probably right that the RM8 paid to Tajudin for Naluri shares in MAS may not be too high. But it could be less, perhaps around RM6, after a reasonable premium is added to the market price. The reason is simple: The price that was finally concluded took into
account MAS' net tangible assets.
This would mean that if about 30 percent is worth RM1.8 billion then anyone who can come up with about RM5.6 billion can be the sole owner of the airline. If you bring the cash in from outside in US dollars that will amount to less than US$2 billion, certainly cheap to own the rights and assets of a national airline like MAS. Of course, the government will not be so foolish to let the airline go that cheap, not to foreigners anyway.
Some reports blaming MAS' losses over the years partly on domestic services make Sarawakians and Sabahans somewhat guilty. If the airline management feel it cannot make money why not allow other airlines, including foreign airlines, to fly to the two East Malaysian states?
Sarawak, which is so keen to promote tourism, has been asking the federal government to allow Singapore Airlines to increase its frequencies from Singapore to Kuching and vice versa from twice to thrice weekly, or more, or better still to daily services. Also, the state has been clamouring for similar services to be introduced from Singapore to Miri, the northern gateway to Sarawak.
Since Air Asia and Transmile entered the picture, at least people in the two states have other options to fly out to Kuala Lumpur. Perhaps it is competition and the way it is organising and running its services that has driven MAS' profits down.
Air accessibility, or the lack of it, and the rather high fare are some of the key grievances of the people of Sarawak and Sabah. They want more air connections involving as many airlines as possible and to let the market regulate its own fares.
The latest announcement concerning the federal government's proposal to take over the assets of the light rail transit companies operating in Klang Valley area has also raised concern in Sarawak and Sabah.
This is going to cost at least RM6 billion. Where is the money going to come from? According to latest reports, Malaysia's foreign reserves are already down to US$29 billion within a short period of time. Can the government afford to act like a rich man trying to dole out aid to entrepreneurial failures?
Is the money going to come again from Petronas, which depends on the oil and gas produced in Sarawak and Sabah as well as Terengganu for about 50 percent of its revenue? After MISC and Proton, which company is going to be next? This the question that is frequently asked now.
Some of the country's poorest roads are still to be found in Sarawak and Sabah. The so-called Pan-Borneo Highway is at best a series of new and old roads, upgraded occasionally at various parts and linked together to form a highway.
Why not get PLUS to take over and build the equivalent to the North-South Expressway between Sarawak and Sabah? Perhaps the people of the two states would not mind if at the end of the day the government has to come to the rescue of the privatised entity. At least there is a real highway.
When the ultra-modern city of Kuala Lumpur cannot even tackle simple flash foods every time there is rain, causing massive jams, it's ironic that people could even think of taking over and trying to build a light rail transit system.
The pieces of eyesore created by half-finished or abandoned public transport projects in Kuala Lumpur stand as a symbol to visitors from the rest of the country of Malaysia's inability to plan and carry out what basically is something very simple to help improve public transport system.
What guarantee is there that when the government takes over the assets of the light rail companies and asks the same people to operate the services on a lease back, they would not fail again? Why not ask others, including outsiders, who have the necessary experiences to organise an integrated public transport system, not only in Kuala Lumpur but also other major cities and towns throughout the country?
TONY THIEN is a freelance writer based in Kuching.