THE government needs to impose a ceiling on a guarantee for loans offered by statutory bodies and companies to avoid increasing government’s debt if they are facing difficulty in fulfilling its obligation.

In making this call, Auditor-General Nik Azman Nik Abdul Majid said the recommendation should be given attention to the follow-up the 2018 audit report on the federal government’s financial statements that which found loans made by five companies under the Ministry of Finance (MoF) Inc could not be paid back accordingly.

The five companies were KL International Airport Berhad, CoVco Holding Berhad, Asset Global Network Sdn Bhd, Jambatan Kedua Sdn Bhd and Danainfra Nasional Berhad.

“In 2018, the government has to pay RM2.839 billion for guaranteeing the loans by the five companies under the MoF Inc.

“From the amount, RM1.753 billion was paid by the previous government while RM1.086 billion was paid by the current administration,” he said in a press conference at the Parliament in conjunction with the audit report yesterday.

Also present was Public Accounts Committee chairman Noraini Ahmad.

Therefore, Nik Azman said a policy should be drawn to include the ceiling on government guarantees by taking into account the country’s financial position and financial capabilities and the viability of the projects the company will finance.

Following the uncertainty of the five companies’ ability to repay the guaranteed loan, he said the auditor-general had issued audit certificates to the government to follow-up on the matter. – Bernama, October 15, 2019.