The Restructuring Of MAS Must Be Transparent, Says Serdang MP
KUALA LUMPUR, Nov 28 – The restructuring of Malaysian Airlines Systems (MAS) Berhad must be transparent for the nation to benefit from it. Serdang MP Ong Kian Ming said a MAS which is healthy and profitable is important to the country. “This will mean the new entity will be able to pay taxes and contribute to government’s budget while being less of a financial liability to Khazanah Nasional. It will also pay more dividends to the government.
“This will also result in providing steady and secure employment to its employees,” he said in a press statement. He said to ensure that the power of the administrator through the passing of the Malaysian Airline System Berhad (Administration) Bill 2014 was not abused, it was paramount that certain principles were adhered to.
“The MAS Bill gives wide powers to the administrator to transfer property and liabilities belonging to MAS. Since both the prime minister and managing director of Khazanah have said that the expected capital injection of RM6 billion into the new entity does not constitute a bailout, the terms of this financial restructuring has to be made public.
“What will happen to MAS’ payments to the three companies that were set up to buy assets (planes and buildings) and then lease them (back) to MAS? The debts of these three companies — Assets Global Network Sdn Bhd (RM961 million), Penerbangan Malaysia Berhad (RM5.8 billion) and Turus Pesawat Sdn Bhd (RM5.3 billion), which amounts to a total of RM12.1 billion are guaranteed by the government,” he said.
He pointed out that fair and transparent re-negotiations of existing supply contracts must be ensured.
“The ability of the new entity, which he dubbed as ‘NewCo’, to renegotiate existing supply contracts, especially those which are seem to be excessively costly, is provided for under Section 18 of the MAS Bill.
“Section 14, which was amended yesterday, is supposed to ensure that there are no disruptions to the services provided by MAS and its subsidiary companies. The fear of some Pakatan MPs is that Section 14 will be used to preserve some of the existing supply contracts to MAS such as the RM6.25 billion for 25 years catering contract ,given in 2003 to Brahim’s Airline Category (BAC).”
Ong said the welfare and rights of MAS employees must also be protected. “The new bill allows it to be freed of any obligation to continue to hire existing MAS employees based on the same contractual terms. Point 8 of Khazanah’s 12-point plan estimates a net reduction of 6,000 employees from the approximately 20,000 employees currently being employed by MAS.
“Khazanah must ensure transparency and fairness in the treatment of employees who will be employed by the new entity.Details of the ‘Employee Consultative Panel’ (ECP) promised by Khazanah to ‘address employee-related concerns’ must be transparent to ensure that the welfare of the employees are protected.” Ong said the promise made by the managing director of Khazanah to provide an update on the restructuring of MAS every three months, is commendable as it is a move in the right direction.
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