GLC debts are not ‘time bombs’, says Treasury

irwan-puaPETALING JAYA: Government-linked companies (GLCs) sometimes incur debts for investment purposes.

As such, the debt levels of such GLCs are not necessarily “time bombs” as they can make profits to later pay off their loans, Treasury Secretary-General Mohd Irwan Serigar Abdullah said, Malay Mail Online reported.

He said these GLCs incurred such debts for investment purposes under the Non-Financial Public Corporations (NFPC) category.

He was responding to DAP MP Tony Pua’s contention yesterday that the Federal Government had managed to cut down its budget deficit by allegedly hiding its spending on multi-billion ringgit projects.

He claimed projects such as the Mass Rapid Transit (MRT) and Light Rail Transit (LRT) extension projects were placed under the NFPC category.

Pua said the NFPCs included 29 GLCs and had experienced a rise in spending deficit from RM10.6 billion in 2013 to RM52.3 billion (2014) and RM56.9 billion (2015).

Pua claimed that the NFPC deficit is “the biggest time bomb to Malaysian public finances”.

He highlighted that Putrajaya’s debt service charges had gone up from RM20.3 billion in 2013 to an expected RM28.9 billion in 2017.

The news portal quoted Irwan Serigar as saying GLCs like Petronas and Khazanah made huge investments. He noted Petronas invested RM5 billion every year.

He said that could not be considered a “time bomb”. He said money invested for a MRT will pay off when people buy tickets. Such GLCs will then be able to repay their own loans, he added.

He noted there were profit-making entities, like Tenaga Nasional and Telekom.

“I don’t know why he (Pua) is saying it’s a time bomb. In the first place, we won’t publish if we are hiding anything. We are publishing the figures.”