The director-general of the Economic Planning Unit, Tan Sri Ali Abu Hassan Sulaiman said yesterday that the government is considering setting up a regulatory authority for privatised entities to ensure that privatisation will bring greater benefits.
He said this option was being studied because of the many weaknesses in having one regulatory authority for each sector, and that if the present practice were continued, more regulatory bodies would have to be created under the Seventh Malaysia Plan as the medical and health services, education, research and development, and training are among the sectors to be privatised.
Apart from such a Privatisation Regulatory Body to bring all privatised entities under its jurisdiction, what Malaysia urgently needs is a Privatisation Watchdog Commission to protect the interests of consumers especially with regard to rates or charges of privatised entities and the quality of their service.
During the debate on the Seventh Malaysia Plan in May, DAP had called for the establishment of a Privatisation Watchdog Commission to vet privatised rates and charges to ensure that the interests of consumers are not sacrificed to corporate greed, whether it be utilities like electricity, sewerage, telecommunications services, etc.
This Privatisation Watchdog Commission, whose objective is to protect the interests of the consumers, should have access to documentation, including statements of accounts and revenue forecasts to enable it to make an assessment as to what should be the fair and just rate, charge or toll that should be charged for a privatised service.
Before the Government makes a final decision on the rate of charge or toll of any privatised service, it should take into account the recommendations of the Privatisation Watchdog Commission.
At present, the toll, rates and charges of privatised entities are made without any public consultation. Furthermore, the public have no mechanism where they can have a say to ensure that all privatised entities maintain a high quality of service.
If the public can participate in these privatisation processes, for instance, the country would not be landed with the burden of having to pay very high rates for the electricity generated by Independent Power Producers(IPPs) - which is a burden for present and future generations.
As a result, Tenaga Nasional’s payments to the IPPs in 1995 constituted 40 per cent of Tenaga Nasional’s operating cost, and when this becomes a burden to the Tenaga Nasional, it also becomes a burden to all consumers who have finally to bear the bill in terms of higher tariffs.
A Privatisation Regulatory Body to bring all privatised entities under its jurisdiction as suggested by the EPU will have a complete government composition, while a Privatisation Watchdog Commission should comprise eminent Malaysians representing the interests of the consumers.
When the Government introduces legislation to set up a Privatisation Regulatory Body, it should also introduce legislation to establish a Privatisation Watchdog Commission.
(18/10/96)