Monday, July 16, 2012

Talam Debt Recovery: A Testament of Pakatan Good Governance

The Selangor administration led by Tan Sri Khalid Ibrahim has proven that its integrity, accountability and good governance in managing the state’s finances and serves as a preview of how Pakatan Rakyat will run Putrajaya

The recent “egg-in-the-face” expose by Datuk Chua Tee Yong over an alleged RM1 billion land scandal in Selangor has instead allowed the state administration to showcase our integrity and accountability in managing the rakyat’s money, in stark contrast to the Barisan Nasional (BN) government.

The facts which has surfaced over the past few days since Datuk Chua’s sensational expose that was given front page treatment by BN-owned mass media has proven that Datuk Chua not only could not tell the difference between debit and credit columns of a balance sheet, he had the uncanny subtraction ability of “two minus one equals three” (2 – 1 = 3).

The records show that Talam Corporation Berhad was allowed to incur debts of RM392 million to the Selangor government during the BN administration before 2008.  These debts were never properly documented or recorded in the books of the state government companies – Universiti Industri Selangor (UNISEL), Kumpulan Hartanah Selangor and Permodalan Negeri Selangor Bhd (PNSB).  What is worse was the fact that there was no effort made by the BN administration to collect these debts.

However, the new Pakatan Rakyat state led by Menteri Besar Tan Sri Khalid Ibrahim has demonstrated that with political will, no company will be able to escape from paying its debts to the Government.  Within a year after discovering the discrepancy in the state-owned companies’ financial records, Tan Sri Khalid has via the Menteri Besar (Incorporated) (MBI) recouped every sen of the RM392 million debt from Talam Corporation in the form of cash and properties.

The most remarkable thing about the entire exercise was the fact that the Selangor government did not have to suffer any haircuts in the debt recovery exercise despite the fact that Talam itself was just recovering from severe financial difficulties.  On the contrary, the state government was able to RM676 million of property assets which was valued by an independent valuer to be worth more at RM685 million.

On the whole, despite having spent hundreds of millions of ringgit more in terms of welfare subsidies and grants for the people of Selangor, such as the RM130 million 20m3 free water subsidy for every household each year, the Mesra Usia Emas Programme for the elderly and the RM300 million infrastructure grant from MBI, the state financial reserves have increased from only RM733 million in 2008 when Pakatan Rakyat took over, to a whopping RM1.9 billion as at May 2012.

This stands in stark contrast with the BN federal government which continues to fund itself with debt and deficit.  Instead of collecting in full the court-ordered judgement of RM589.15 million from Tan Sri Tajudin Ramli, the BN administration has chosen to write off the debt in its entirety, causing massive losses to the rakyat of Malaysia.

What rubs salt to wound is the fact that these debts were incurred as a result of the privatization of Malaysia Airlines System (MAS) to Tan Sri Tajudin and his subsequent bailout which cost tax-payers more than RM3.2 billion.  MAS had then ratcheted up more than RM8 billion in debt before it was handed back to the Government in 2001.

As a result of such massive bailouts as well as write off of debts owed by crony companies, the Federal Government debt has increased by leaps and bounds from RM242 billion in 2007 to RM363 billion in 2009 and RM456 billion in 2011.  This represents an 88.4% increase in Federal Government debt in just 4 years!  The above has yet to take into account the unseen debts guaranteed by the Federal Government which stands at RM117 billion as at December 2011.

The above examples offers incontrovertible testimony that Pakatan Rakyat will be much better managers of the country’s finances compared to BN. We will ensure that all debts are collected and are utilized to the benefit of the rakyat.  We will stop bailouts of political cronies and ensure that brakes are applied to the runaway debt train.

There is no question that by ruling the country with the principles of competency, accountability and transparency, as showcased in the examples above, Pakatan Rakyat is the proven coalition to allow Malaysians to achieve their full unrealized potentials.
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