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Statement by Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong on the Bernama interview on the Malaysian Airline System, MAS, by the Finance Minister Tun Daim Zainuddin. 19.1.2001.

Malaysia Airline System, MAS, plies major international routes. But, the 1997 economic crisis, the spiralling oil price and the cutthroat competition reveal its weaknesses.

MAS becomes a bone of contention. It owes at least RM 8.5 billion and its 22,000 staff members have relatively low morale.

The Finance Minister believes that the Malaysian Government buying back 29.09% MAS shares from Tan Sri Tajuddin's company, Naluri, is absolutely necessary and that it will take steps to improve and revive MAS.

Apparently, the Government buys the MAS equity at RM 8 per share, costing RM 1.79 billion. It has paid 10%. In 1995, Naluri bought the shares at RM 8.70 each while the market rate was RM 5. Tun Daim thinks that foreign investors value each MAS share between RM 9 to RM 15.

Has the Government rescued MAS?

As an international airline, servicing major routes, it has potential. Its
domestic service loses about RM 1 million a day. Only international routes bring in profits. As the company faces difficulty, we would like to know the true state including its management.

Naluri's acquisition and relinquishment of MAS equity within five years
raise many questions such as its management. We don't know the true answers.

MORE THAN 2 FAILURES

Since 1983, 434 projects have been privatized. Tun Daim mentions the success of Tenaga Nasional Berhad, TNB, (electricity) and Telekom Malaysia (telephones). But, matters like Independent Power Producers and Pos Malaysia's handling of buying of computers by Employees' Provident Fund, EPF, members and the quality of service cause unhappiness.

The Finance Minister says that there are only two failures in privatization, namely MAS and Light Rail Transit, LRT. Recently, the Government floats RM 6 billion bonds to restructure LRT in Kuala Lumpur and Petaling Jaya.

Other privatized companies that failed include Indah Water Konsortium, IWK. The Government gave concession to IWK to manage sewage in the whole country for 31 years. It lost money. Then, the Government came to the rescue, pumping in hundreds of millions of ringgits.

How many privatized companies have succeeded or failed? Despite the
Government's insistence on privatization, what is its policy?

The Government will spend at least RM 1.8 billion on MAS. It should let us know the restructuring proposal and the ways to improve the morale and service of MAS staff members.

Dr Tan Seng Giaw