Saturday November 21, 2009
Experts: Selangor’s move not economically viable
By SIRA HABIBU
PETALING JAYA: The buying over of Talam Corporation’s RM391.7mil debts by the Selangor government is a risky business, according to experts.
Prof Abdul Razak Chik of Universiti Utara Malaysia said Selangor should not have taken such a risk because it posed a burden to the state. He said the state would incur unnecessary costs to recover the debts.
He added that the bailing out of government-linked companies during an economic crisis was understandable but bailing out private companies was not economically viable.
He said this in response to the recent controversy surrounding Selangor’s move to buy over debts owed by the property developer to subsidiaries of government-linked companies, namely Selangor Development Corporation, Kumpulan Darul Ehsan Berhad and Permodalan Negri Selangor Bhd.
International Islamic University Economic Department head Dr Alias Mat Derus said the people were wondering why the state government had to buy over debts owed by a property developer.
“Whether it is a political move or not, from the economic point of view it is not a good move,” he said, adding that taxpayers’ money should not be used to buy over debts of private companies.
Dr Alias said the Selangor government might have wanted to emulate the US government, which had resorted to injecting capital into private companies.
Professor Amir Burhanuddin of Universiti Sains Malaysia questioned how the buyover would benefit Selangor and its people.
“Who is benefiting from this? Why is the state giving priority to this buyover? This is not the time to consolidate debts. The state should be looking into making solid investments instead,” he said.
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