Cops hurt by cutbacks

KUALA LUMPUR, Dec 8 — The economic slowdown and belt-tightening by the government is hurting the men in blue. Not only has the purchase of 21 helicopters been deferred but several other projects listed under the 9th Malaysia Plan have been shelved.

This includes the purchase of patrol boats, a laser speed detection system and an intelligent communication system.

Sources told The Malaysian Insider that the allocation for the police force under the 9MP was slashed by more than RM400 million.

Top of the list of deferred items were helicopters which the Royal Malaysian Police had sought to improve patrolling along the coastal areas.

Government officials told The Malaysian Insider that the philosophy of spending has changed since the onset of the global economic turmoil earlier this year.

Projects or equipment which had high import content were deferred or cancelled and the funds funnelled instead to projects which could generate higher economic activity.

The Abdullah administration has little choice but to re-look some of the projects and expenditure given the drop in the price of crude oil and palm oil, both which provide the government with more than 50 per cent of its revenue.

To date, the government has deferred the purchase of helicopters for the Armed Forces and the construction of the West Coast highway.

It is understood that there is a possibility of other projects or the purchase of other big-ticket items being deferred if the economic situation becomes more challenging, especially if the price of crude oil stays around US$50 per barrel.

The effect of lower oil prices will be felt in 2010. The reason: the dividend Petronas pays to the government in 2009 is based on its earnings this year.

On average, the price of oil per barrel this year is about US$100. But the dividend to be paid in 2010 by Petronas will be based on 2009 earnings.

This amount is likely to be affected drastically given the expected softening of the crude oil price between now and next year.