Leader of the NST: Felcra fiasco | New Strait Times

When we think of blunders, gaffes or missteps, we think of Malaysian state-owned enterprises.

Such scathing assessments cannot be blamed.

So often, the multi-billion dollar losses suffered by these bungling companies no longer make headlines.

Now it is the turn of Felcra Bhd, which owes the government RM3.67 billion, almost half of which is owed by Felcra Properties and the Semarak20 mixed-use development project.

If our reading of the national narrative on the Felcra fiasco is correct, the focus appears to be on Felcra Bhd’s ability to pay its debt.

The story could not be more false. Felcra’s blunders, mistakes and clumsiness have their origins in several factors.

The first problem is the lack of political will to act quickly.

For reasons best known to successive governments after each general election, it seems very difficult to act quickly.

As the Felcra failure shows, procrastination is a theft of government money.

Much of it will ultimately fall on taxpayers in the form of service tax, value-added tax, income tax or whatever other tax the 21st century taxman can think of.

As the Public Accounts Committee recently revealed, the financial failure of Semarak20 surfaced as early as 2019, when Felcra launched an “SOS” appeal for RM544 million from the government to continue the project.

Why didn’t the ministries responsible for financing and supervising Felcra act then rather than wait until the debt reached RM3.67 billion? There is certainly some responsibility in this situation, as quick action could have prevented the rot from developing.

Those in power did not solve the problem.

They just let it get cancerous. But what’s worse is that those in power today don’t seem to want to do that either.

Second, there is the human factor. The financial failures suggest that some of the people chosen to run the Felcra companies and their boards are not doing the job for which they are generously compensated.

It is now clear that some of Felcra’s activities do not fall within its jurisdiction.

The board could have stopped them, but clearly they did not. The essential role of directors is to ask the right questions.

Most don’t because they don’t know enough about the business to keep the business from going

in the wrong direction.

If their role is to oversee the management of the company — which is clearly the case — then why did they allow the company to venture into an industry it did not know well and fail so badly? so disastrous?

This is pure incompetence. Incompetence is reason enough to merit dismissal, but why appoint such incompetent people to this position? We’re used to seeing politics smear government businesses.

This must stop. We detect a worrying trend, our third factor. The government’s talent pool appears to come from the same pool, suggesting that Malaysian skills are not that plentiful.

With few exceptions, senior executives and board members appear to be playing musical chairs among retired civil servants. It is time to look beyond the duck pond.

Finally, there is the lack of accountability. People come and go, making billions of ringgit holes in state-owned enterprises, but only a few are forced to pay for their sins.

Others roam the streets of Kuala Lumpur and beyond in their Maseratis with matching Jimmy Choo shoes. The choice here is: responsibility or financial fiasco.