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Who Will Pay Up Government Loans If Lim Keng Yaik Punishes State Governments That Default On Federal Loans By Refusing To Let Them Borrow Any More Money?

Press Statement
by Lim Guan Eng

(Petaling Jaya, Wednesday): DAP express shock at Minister for Energy, Water and Communications, Datuk Seri Dr. Lim Keng Yaik’s revelation that State governments who do not service or pay up Federal Government loans taken for water projects will be punished by not being allowed to take any more Federal loans. Such punishment is ridiculous and will neither frighten any state government nor encourage them to pay up.

According to Lim, state governments owe the Federal government a total of RM 7.6 billion as follows:-

 Kedah:                           RM1.18b

- Negri Sembilan:            RM1.07b

- Pahang:                        RM960 million

- Selangor:                      RM772 million

- Malacca:                      RM703 million

- Perak:                          RM567 million

- Johor:                          RM528 million

- Terengganu                  RM 503 million

- Penang                        RM 339 million

-Kelantan                      RM 314 million

- Sarawak                     RM 296 million

- Sabah                         RM 293 million

- Perlis                          RM 41 million

TOTAL                  RM 7,566 million

Who will pay up government loans if Lim Keng Yaik punishes state governments that default on Federal government loans by refusing to let them borrow any more money? Such punishment for defaulting on loans is so light as to be ridiculous and everyone will want to borrow money from the Federal government.

And Lim wants to get back the loans by passing these Water Services Industry (WSI) 2006 and Suruhanjaya Perkhidmatan Air Negara(SPAN) 2006 Bills so that the government can take over the water supply services of all the states. Such an approach is inherently unfair to the states that do not default and do repay the loans on time, expecially states like Penang. Lim should take action to recover the loans as there are many ways to do so as provided in our laws and Federal Constitution.

These are amongst the reasons DAP opposes the Water Services Industry (WSI) 2006 and Suruhanjaya Perkhidmatan Air Negara(SPAN) 2006 Bills that would be tabled by Minister for Energy, Water and Communications, Datuk Seri Dr. Lim Keng Yaik in Parliament next Monday. 8 other reasons why DAP opposes these two bills as not in the national interests of Malaysia, economic interests of consumers and contray to our fundamental human right to affordable and available access to water.

1.      Threaten national sovereignty and security by putting to risk the control and ownership of water supply in the hands of foreigners whose profit motive is unlikely to have  our national interests at heart.

2.      Infringes on our fundamental human right to affordable and available access to water is a legally binding responsibility of any good and trustworthy government;

3.      Allowing market forces to decide on water supply and denying those who can not pay water is not only unethical but immoral under all religious norms;

4.      Failure to address environmental concerns by protecting water sources as witnessed by privatized companies allowing smelly and contaminated water to reach consumers in the Klang valley.

5.      Lack of democratic consultations with the rakyat on the impact of these two bills on the water rates;

6.      Parasitic linkage of sewerage to connection of water supply is unfair, irresponsible and an abuse of power as water and sewerage should be delinked as two separate and unconnected services;

7.      Failure to promote competitiveness and competence by linking performance with compensation as state water corporations that are profitable are not rewarded and instead lumped as equally non-performing with corporations that are loss-making and performing poorly.

8.      No guarantees that there will be increased efficiency, costs and quality of water supplied as the record of privatized companies in the water industry has not been encouraging.

Many consumers have complained of dirty water or even contaminated water from their taps especially those living the Klang Valley. How can we attract investor’s confidence in our economic development if we can not even guarantee regular supply of clean water? DAP calls for a full review of these two bills to ensure that the national interest of the country, the consumer interest of Malaysians and their fundamental human rights, are fully considered.


* Lim Guan Eng,  Setiausaha Agung DAP

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