Banks must ensure credit availability, says Najib

By Wednesday March 11th, 2009 No Comments

KUALA LUMPUR, March 11 – The banking system must be functional to ensure that credit is available in the country, otherwise the recession will deepen, says Deputy Prime Minister Datuk Seri Najib Tun Razak.

He said the three new guarantee funds to be introduced by the government would also help to generate more economic activities in the country.

“I believe the second package would have a desired impact because there are additional monies available for private companies to undertake investment and thus create more economic activities and ensure the level of employment rate be maintained,” he told reporters after witnessing the signing of the water restructuring deal between Pengurusan Aset Air Bhd and Johor state government, here today.

He had yesterday announced the country’s second economic package worth RM60 billion to be used over two years to spur growth and prevent the country from slipping into a deep recession.

Najib, who is also Finance Minister said the additional stimulus plan would also help to accelerate some of the projects under the Ninth Malaysia Plan.

“Some of the projects, especially insfrastructure projects could start soon,” he said.

“For example, the RM2 billion worth of projects under the Education Ministry which are yet to be given out, because there was no allocation…with the additional allocation, these projects can kick off immediately,” he added.

Asked on how much the government will spend for 2009, Najib said, “We are trying as much as we can from the allocation, particularly in terms of the government expenditure.”

On the 2010 Budget, he said the government will table the budget in October this year.

“This is not part of the RM60 billion. It is a normal allocation,” he added.

Meanwhile, in his speech earlier, Najib said the restructuring of the water services in Johor will help the state government clear its debts with the Federal government which has reached RM10.5 billion in total.

The Johor state government could not afford to pay as the concession company which received the novation loan faced cash flow problems after the tariff could not be increased.

Therefore, the Federal government, aware of the problems, acted quickly and took the responsibility to resolve the issue.

Najib said Pengurusan Aset Air Bhd which took over the water related assets of Johor and the concession companies, is expected to spend RM3.5 billion over a 30-year period to improve the water distribution system in Johor.

With the restructuring, the state will be able to avoid the increase in water tariff by 19 per cent this year.

Source : Bernama

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