The founding chairman of Petronas and its first CEO, Tengku Razaleigh Hamzah said yesterday that the federal government in Putrajaya has been treating the oil and gas corporation as a cash cow, especially in bailing out government-linked companies in financial trouble.
Tengku Razaleigh, or Ku Li, said that since its inception in 1974, Petronas has paid out RM529 billion to the government in the form of dividends, taxes, petroleum revenue and export duties.
He also said the government’s reliance on Petronas to rescue financially floundering government-linked companies (GLCs) had been going on since 1985.
Ku Li was the Minister of Finance from 1974 to 1984.
In 1985, Petronas bailed out Bank Bumiputra with a Rm2.5 billion infusion. In 1991, Petronas shored up the banks’ finances again when it pumped in an additional RM1 billion.
In 1997, he said Petronas had to rescue the troubled Konsortium Perkapalan Berhad for RM2 billion.
He added that Petronas was made to underwrite the construction of the KLCC Twin Towers for RM6 billion and the construction of Putrajaya for a further RM22 billion.
“This amount could have been used more productively to fund a national pension programme for Malaysians, as has been done by a certain Scandinavian country,” he said in his speech at the launch of the book “Rich Malaysia, Poor Malaysians” at the Sultan Sulaiman Club in Kuala Lumpur last night.
The bailout and construction of mega projects was done during the premiership of Tun Dr Mahathir Mohamad, who initiated a series of major infrastructure ventures in the 1990s.
Ku Li said the exorbitant amount of the bailout and construction of these projects that was forced onto Petronas had also deprived the company from the much needed cash build-up for reinvestment, which would ensure its business sustainability.
He said today Petronas was on par with oil majors and was ranked as one of Fortune 500’s largest and profitable oil and gas companies.
“But sadly, it is being abused and treated as the piggy bank whenever the government needed cash in a hurry,” he said.
Ku Li said while subsidising of consumer goods was not the most efficient of ways in managing the high cost of living, it was fairly understandable if the government extended a helping hand to the small man.
“What is sinful and cannot be forgiven is the ease with which the powers that be had been dishing out subsidies to such entities like the national power supplier, the independent power producers and some other non-power outfits,” he said.
Story: The Malaysian Insider