Subsidizing profits

In their story about MPs calling for certain state-owned corporations to be privatized, Kuensel quoted me as saying that the government was giving too much subsidies to the corporations. “As if providing land was not enough, the government is even generous enough to provide them subsidy, which meant extra burden to the government”, I supposedly said.

The quote is correct. But the context is wrong. I didn’t complain about subsidies that corporations receive. In fact, I believe that we must do a better job of ensuring that corporations that provide a public service – BBS, for example – have access to more predictable and sustainable subsidies without having to put up with political interference.

What I did complain about, and what I objected to, was the Nu 144 million earmarked as subsidy for the Education City. The subsidy, we were told, covers costs for constructing ancillary infrastructure including road, telecommunications, water supply and bridge.

I objected to the Education City subsidy because the government is already supposedly allocating 1000 acres of prime land for the project. If so, that would be a huge contribution by the government. So the investors – DHI and their FDI partner – should pay for the rest, including the ancillary infrastructure.

Otherwise, the government may end up subsidizing the profits of the Education City investors.