Wednesday 17 October 2012

Justify RM1.6b write-off for Perwaja Terengganu, govt told

By Opalyn Mok

GEORGE TOWN, Oct 17 ― DAP secretary-general Lim Guan Eng today sought Putrajaya’s explanation for Perwaja Terengganu’s RM1.6 billion debt write-off given that the loss-making steelmaker is a public listed company.

The Auditor-General’s Report 2011 had revealed the write-off when detailing loans owed to Putrajaya by companies and state governments.

“Perwaja Terengganu is a public listed company so it should be able to pay up the debts,” Lim (picture), who is both Penang chief minister and Bagan MP, told reporters here today.

He said the federal government’s move to write off the debt is bad as it will encourage other companies to stop paying up their debts.

“This will tell others that if you pay up your debts, you don’t get anything but you have everything to gain when you default in your payments as your debts will get written off,” Lim said.

According to the A-G’s Report, Perwaja Terengganu has a RM1.725 billion loan with the federal government, of which it has only repaid RM100 million. As of 2011, it still owed a total of RM1.625 billion due over 14 to 17 years.

“In the report, it was stated that the federal treasury will be making allocations to write off the loan starting from 2011 and is expected to completely write it off by 2027,” Lim said.

“It goes to show that those who don’t pay up their debts will just get off scot-free and even get their loans written off while those of us who continue to service our loan, we don’t get any incentive or anything at all,” he said.

In the report, it was also stated that restructuring of some of the loans will be undertaken for 13 companies while five other companies will be sent reminders to pay up.

On another matter, also from the A-G’s Report, four state government agencies have been given the maximum four-star rating.

The agencies are Penang Development Corporation (PDC), State Financial Department, Penang Islamic Religious Council and the State Secretariat.

Congratulating the agencies, Lim said the state government will present each agency with RM10,000 for achieving a four-star recognition from the A-G.

“Next year, the state government will give RM15,000 to each department that earns a four-star rating from the AG,” he said.

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