No need for alarm, MAB shutdown just an option

Meanwhile, BPMB launched the SDFF to fund more firms to adopt sustainable practices in their biz

By NG MIN SHEN / Pic By ISMAIL CHE RUS

There is no need for unnecessary alarm on the possibility of Malaysia Airlines Bhd (MAB) being shut down as it is merely one of the options that could be exercised as mentioned by Prime Minister (PM) Tun Dr Mahathir Mohamad, said Finance Minister Lim Guan Eng.

He was speaking in reference to Dr Mahathir’s statement in Parliament yesterday that the government is mulling all options including shutting down or selling MAB, as endless losses continue to haunt the national carrier.

Following Dr Mahathir’s statement, former PM Datuk Seri Mohd Najib Razak said MAB should not be closed down or sold off as it is the national airline, and that the government should revert to the original turnaround plan to revive the carrier.

“The former PM is not fair to Dr Mahathir. He (Dr Mahathir) was just talking about the various options that were presented in reference to MAB. He did not say that he will close down MAB,” Lim told reporters at the launch of the Sustainable Development Financing Fund (SDFF) in Kuala Lumpur yesterday.

However, Najib’s remarks implied that the national airline would indeed be shut down, Lim added.

“Let’s look at what the PM said — not that we’re going to close MAB. We want to give assurance to the employees. We do not want to allow the former PM to create or cause unnecessary disruption and anxiety,” he said.

He said Najib’s intention was to create alarm, which Lim deemed as unnecessary.

Najib had said during his tenure as chairman of Khazanah Nasional Bhd that the turnaround plan was indeed working and just required more time. Therefore, there was no reason for the airline to be sold off or closed down.

Once considered the nation’s pride by being among the world’s best airlines, MAB has been on a loss-making path since 1997.

Khazanah took over the ailing airline in 2014 following the tragedies of MH370 and MH17 in the same year, despite opposition from certain quarters — namely the National Union of Flight Attendants Malaysia.

Khazanah then announced a RM6 billion restructuring plan which involved a cost-reduction exercise, review of fleet size and rationalisation of MAB flight routes.

However, the national flag carrier failed to meet the turnaround target, which resulted in half of Khazanah’s RM7.3 billion impairments in 2018.

On a recent Bloomberg report that said Malaysia’s stock gauge was the only decliner in the region to date as investors wait for the new government to deliver on its promises, Lim called for observers to look at the bigger picture and the country’s strong fundamentals.

“Stocks are outside of government control. Sometimes, foreign countries’ (markets) go up and down. The media has the right to report such things, but we should also look at more stable figures,” he said.

He noted that various industry experts had predicted Malaysia’s economic growth in 2018 to register below 4.5%.

Yet, the country’s full-year GDP growth came in above expectations at 4.7% for 2018. 

“We should not get tied down by such reports which are based on temporary periods. We should look at things on a quarterly or yearly basis,” Lim said, adding that the FTSE Bursa Malaysia KLCI was among the best performers in the region last year.

Meanwhile, Bank Pembangunan Malaysia Bhd (BPMB) yesterday launched the SDFF, a RM1 billion fund aimed at supporting the nation’s sustainable development target by incentivising more companies to adopt sustainable practices in their business strategies and operations.

Under the fund, BPMB will provide financing with a financing-rate subsidy of 2% to companies that can demonstrate continuous contribution to the 17 Sustainable Development Goals under the United Nations Development Programme.

The fund is one of three separate funds totalling RM4.5 billion managed by BPMB, as mandated by the Ministry of Finance.

Lim also announced that BPMB would be setting up an Industry Sustainability Education Fund to support efforts in educating the public to “not only care for the environment, but also have the courage to whistleblow to expose any environmental crime”.

This follows the dumping of toxic waste in the Kim Kim River in Pasir Gudang, Johor, recently which resulted in grave pollution, closure of schools and hundreds of affected schoolchildren being hospitalised.

Lim said stern action will be taken against the parties involved in the toxic waste incident at the Kim Kim River.

“BPMB will be the prime mover, custodian and manager of this fund, but everyone, both individuals and corporations, is encouraged to contribute to this fund. We will then do a review of this fund to prove sustainability is profitable and, therefore, get companies to adopt best practices,” he added.

BPMB chairman Datuk Zaiton Mohd Hassan added that the bank is looking at an initial rollout of RM10 million for the fund, which will come from both BPMB and other corporates.