Privatisation of government departments may cost taxpayers billions in losses

Some referred to the privatisation of the public services sector in the eighties as piratisation since most infrastructure projects and public sector entities were farmed out to Mahathir’s and Daim’s cronies. Source (pic): TTF

TTF: The policy of privatising the public services sector was first introduced by Mahathir  in 1983, two years after his appointment as Prime Minister.

In the years that followed, the Government of Malaysia (GoM) began farming out major infrastructure projects and public sector entities to private companies, entities such as the Malaysian Airline System, Lembaga Letrik Negara and Jabatan Telekom, all of which were privatised and became Malaysia Airlines, Tenaga Nasional Berhad and Telekom Malaysia Berhad respectively.

However, some of the privatised projects began encountering problems late into the eighties and throughout the nineties and were subsequently re-nationalised at the cost of taxpayers.

On the 27th of August 2001, Malaysiakini wrote:

In recent months the government has spent billions in taking over a number of previously privatised projects, including the RM1.8 billion for debt-ridden national carrier Malaysia Airlines System.

Last month, RM4 billion was spent to rescue UEM, whose subsidiary Renong is the major contractor for a number of privatised highway projects.

The government is also preparing to bail out two major light rail transit companies amounting to RM6 billion.

Over the years, opposition figures and foreign investors have criticised the government’s privatisation for promoting crony capitalism as well as widening the gap between the rich and poor.

Earlier today, Mahathir announced that several government departments may be privatised to house staff members who will be removed from civil service.

As far as his previous administration in the eighties went, privatization referred to either of the following:

1. contracting of services to the private sector

2. joint ventures with the private sector

3. parrial private ownership of publicly-owned facilities

4. complete transfer of ownership of public facilities to the private sector

Can the Prime Minister be specific which of the above we’re looking at and what guarantee there is that the privatisation exercise will not fail yet again and cost taxpayers billions upon billions through bailout schemes?

KUALA LUMPUR: Several government departments may be privatised to house staff members who will be removed from civil service.

Prime Minister Tun Dr Mahathir Mohamad said that this is among several options being looked into to help sustain jobs for the former civil servants.

Dr Mahathir was commenting on the need to trim the number of staff in the civil workforce, which is said to be bloated at 1.7 million.

“We are looking into the situation, to determine (the sustainability of their jobs) if they lose their current positions. We are looking at options such as transferring them to different departments or moving them to the private sector.

“And we can privatise several departments, just like what we did with Telekom. We give Telekom some funds, and transfer the staff members there.

“The workers have a choice of staying within the civil service, or moving to the private sector,” he said at a press conference at Parliament today.

Telekom, now a well-known telecommunications company, was privatised in 1984.


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