Second privatisation wave: Now that's scary... - Anil Netto

I was paying only casual attention while Najib droned on over the radio when tabling his Budget in Parliament yesterday.

But my ears pricked up when he mentioned a “second wave of privatisation”.

The Bernama headline says it all: ‘Companies Under MOF Inc And Other Viable Agencies To Be Privatise’ (sic).

Why only the viable agencies? Is this going to be more of “privatisation of profits and socialisation of losses” – at the expense of the Malaysian public?

The first thing that crossed my mind was: which cash cow is going to be handed over to which crony now? Don’t tell me they are going ahead with plans to privatise cash cow Plus Expressways Bhd, which is owned by Khazanah (24 per cent directly and 40 per cent indirectly).

Plus Expressways owns 100 per cent of Projek Lebuhraya Utara-Selatan Bhd, which operates the North-South Highway. Last year, Plus Expressways earned a profit before tax of RM1.5 billion on the back of RM2.2 billion in toll collection.

A low-profile firm, Asas Serba, recently made an audacious proposal to take over all 22 highway concessionaire firms for RM50 billion. (Where are they going to get the money from?) The firm is reportedly led by four businessmen, two of whom are former senior executives of the Renong conglomerate.

S Jayasankaran, writing in the Business Times on 19 October, reported:

IT APPEARS that the staggering RM50 billion (S$20.7 billion) proposal from little known Asas Serba to buy all 22 highway concessionaires in the country is a serious one.

The proposal – first reported by BT two months ago – calls for the company to buy over the tolled highways and cut tolls by 20 per cent on the premise that owning all of the nation’s tolled highways would result in economies of scale and, presumably, lower costs.

That this is a proposal considered seriously by the government cannot be denied. Nor Mohamad Yakcop, the minister of the Economic Planning Unit, dismissed the notion last month only to be contradicted by his boss Prime Minister Najib Razak.

Mr Najib, who is also finance minister, said he hadn’t seen the proposal yet, which implied that he was waiting to see it. This is a sharp reversal from the same Mr Najib who, two months ago, said that Khazanah, the investment arm of the federal government, had no intention of selling Plus Expressways, the biggest toll concessionaire in Malaysia. The premier is also the chairman of Khazanah.

You can check out some of the other likely targets of privatisation among Khazanah’s portfolio of companies here.

(Except for one share owned by the Federal Land Commissioner, Khazanah’s shares are owned by the Minister of Finance Incorporated.)

It looks as if the trend of neo-liberal policies is likely to continue.

At this rate, if and when a new party or coalition takes over federal power over from the BN, most of the profit-making or “viable” government agencies could have been privatised, leaving only the deficit-incurring agencies left in the government’s stable (i.e. in the hands of the Malaysian public).