ada apa dengan PFI?

Every parent knows the temptation.

When they are short of money, the pennies in the children's money box are a appealing target: Borrow now, put them back later.

In Malaysia, the Employees' Provident Fund (EPF) is a sort of national piggy bank.

And in these sluggish times, the RM260 billion in KWSP’s kitty looks especially tempting.

Last July, the Government that almost half of the initial RM15 billion allocated for projects under the 9th Malaysia Plan (9MP) will be funded by EPF under a new initiative known as Private Finance Initaities (PFI).

Why PFI and not privatisation?

Well, the Government claims that PFI will ensure a fair distribution of risks and rewards between the Government and private sector, to prevent the Government and ultimately, the taxpayers from suffering from lopsided agreements which favour the private sector excessively.

But, cut through the eco-babble, through the thicket of jargon, and at the quick we find that PFI is similar to privatisation, with some minor adjustments.

Simply, an old wine in a new bottle.

But what we find most interesting is that EPF has been asked to provide financing for 425 projects worth RM7 billion ringgit under 9 MP. The Government has said that by doing so EPF will get a "better return".

"It’s a good investment for the EPF as the rental is already guaranteed, and EPF enjoys better returns," Abdullah said in July 2006.

We do not what he means by better returns.

In the UK, contractors undertaking PFI projects have to finance the project on its own, through loans from banks or internally generated funds.

Thus, it is quite bewildering that contractors in Malaysia are given special privilege to obtain financing solely from the EPF.

Why should EPF be given this responsibility, if the contractors are strong enough to obtain financing based on its own strength?

Perhaps PFI is just another vehicle to bail out financially distressed companies?

We have read in the papers that 60,000 Class F contractors have been out of jobs due to the PM’s tight belting measures.

Comprised mainly of UMNO apparatchiks, this group is seen as a powerful force in the coming 2007 UMNO elections.

They are blaming the Government on their plight.

So, is PFI the carrot to diffuse their anger?