The federal government came under fire from Penang Chief Minister Lim Guan Eng today for the prolonged delay in releasing the RM500 million rescue package for the melting frozen seafood industry.

The DAP-led Pakatan Rakyat state government wants Putrajaya to expedite execution of the package at 'rocket speed' to save the industry from total collapse within the next three months.

lim guan eng penang cable car event 191208 04 Lim is clueless on the reasons behind the government dragging its feet in saving the industry, even though the allocation had been set aside for some time.

"I don't know why such a prolonged delay in the release of the allotted money. The federal government should execute the package at rocket speed to save the industry," he said.

He pointed out that the lucrative multi-billion ringgit industry was on the verge of collapse due to the incompetence of the federal government, not the manufacturers, to comply with export guidelines set by the European Union since 2005.

"The problem was coming for a long time and the power to rectify is within the federal government.

"I don't understand why the federal government is not urgently addressing the problem," he said after riding on the Penang Hill funicular train, which recently underwent RM700,000 cable upgrading works.

Lim, also the Bagan Member of Parliament, acknowledged that as a major player, Penang's economy would be badly affected by the industrial plight.

'Self-imposed ban'

The frozen seafood export business is on the brink of collapse due to the government's prolonged self-imposed ban since April on the product export to the 28-member state European Union (EU) market.

The 'facing saving' ban was adopted after EU health inspectors discovered that Malaysian industry operations did not meet the union's standards.

The Malaysian Frozen Foods Processors Association (MFFPA) claimed that the industry has reached a dead end due to the incompetence of the Malaysian Competent Authority (MCA).

MFFPA is critical against MCA's protracted delay to carry out rectification and upgrading works in compliance with the EU guidelines on frozen food export.

Some 90 percent of EU's complaints were linked to MCA-governed areas, among others, cleanliness in fishery vessels, handling of marine catch at landing ports and incompetent backyard factories.

MCA, headed by the Health Ministry in cooperation with the Agriculture and Agro-based Industry Ministry, is to improve the effectiveness of inspection and auditing services in Malaysia for fishery exports and the quality and safety of fish supplies to meet the requirements of import markets.

Second largest food industry

Prior to the ban, the frozen seafood industry was the country's second largest food industry with a RM2.5 billion export value, with 70 percent going to EU countries.

Penang and Perak are two major states contributing half of the country's global export, which accounts some three percent of world trade.

But since April, the industry has suffered RM1.5 billion loss in sales and production as stocks of EU-bound frozen food are now stuck in cold rooms, with each major company losing between RM5 million and RM20 million.

Now it is up to the Finance Ministry to execute the half-a-billion package to rescue the industry's 43 frozen seafood processing companies and save the livelihood of 15,000 direct workers and 50,000 indirect workers.

The Penang government, which is gearing up to face the flooding of retrenched workers due a global downturn, is now outlining strategies to increase employment opportunities if the industry eventually retrenches workers.

"We are closely monitoring the situation and preparing for the worst-case scenario," said Lim.

Meanwhile, Bukit Bendera parliamentarian Liew Chin Tong said the industry would not face extinction if the federal government had the political will to exert and enforce competency among its relevant agencies.