by Parliamentary Opposition Leader, DAP Secretary- General and MP for Petaling, Lim Kit Siang, in PJ on Tuesday, 8th Sept . 1981:
DAP calls on Acting Prime Minister, Datuk Musa Hitam, to reconsider the decision to write-off the $23 million Federal government loan to Ngeri Sembilan State Government because of Gula N.S. losses.
I have today written to the Acting Prime Minister, Datuk Musa Hitam, expressing my grave concern at his announcement to write-off the $23 million Federal Government loan to the Ngeri Sembilan State Government over the losses of Gula N.S..
In my letter, I urged Datuk Musa to reconsider the decision to write-off the Federal Government loan of $23 million to the Ngeri Sembilan State Government, as the circumstances the write-off was announced would set a most unhealthy precedent for other state governments and public enterprises.
Datuk Musa had said that the write-off of $23 million to the N.S. State Government should not be seen as the Federal Government condoning the losses, but should serve as a warning to all other SEDCs condoning the losses, but should serve as a warning to all other SEDCs that they should conduct proper studies before venturing in any projects.
I dare say that such a ‘warning’ would be welcomed by most if not all SEDCs in the country, which would like to have even bigger write-off for failing enterprises. I hope that we will not reach the stage where the bigger the Federal government write-off, it mean the bigger the warning!
A write-off of such a cast sum of pubic money without a public accounting of the reasons for the failure of the Gula N.S., a government enterprise, will have no instructive effect to prevent future Gula N.S. disasters from recurring in Ngeri Sembilan or other states.
There clearly must be a proper criteria for the write-off of Federal government loans to state governments as it involves the taxpayers’ money.
At the minimum, there must be a public accounting of the reasons for the failure of public enterprises, what lessons should be learnt by all government agencies and officials, and whether those responsible for the failure of the enterprise and the loss of vast sums of taxpayers’ money have been brought to book because of their negligence or incompetence, or the reasons for the failure were completely beyond the control of human resources.
The Federal Government is not without blame for the Gula N.S. losses, for before it givens such a big loan of $23 million, Treasury officials should have vetted the economic viability if the project. The entire blame of the losses of Gula N.S. should not be borne by the Ngeri Sembilan SEDC alone, but must be shared by the Federal Government officials who failed to vet the project in the first instance, and to monitor the progress of the project during the stage of implementation.
To write-off the Federal Government loan without a full public accounting would tantamount to the Federal Government absolving itself from responsibility too. This would be a most undesirable example to set. The Gula N.S. must be a public reference point fir all public enterprises and government officials as to what they ,must no do, and for the public to hold public enterprises to higher standards of competence and performance in the management of public funds. Only in this way can a write-off of the Federal government loan be justified.