KUALA LUMPUR: The International Trade and Industry Minister has confirmed that Proton has approached the Government for funding, adding that the request is being studied.
“They have submitted (their request) and it is still a work in progress,” said Datuk Seri Mustapa Mohamed after a dialogue on Malaysia and the Asean Economic Community (AEC) here yesterday.
Mustapa did not divulge the nature of Proton’s request, and skirted disclosing the specifics of the request from Proton by saying “it’s not our practice to reveal details”.
StarBiz had reported yesterday that Proton was seeking up to RM3bil in funding from the Government and Petroliam Nasional Bhd (Petronas), but has been futile in its attempts so far.
Proton, which is a unit of DRB-Hicom Bhd, is seeking fresh funding to execute its transformation plan that will see new models being developed, including an electric car.
It has been reported that Proton has committed RM3.8bil in investments until 2017 and needs more capital to be competitive and achieve its turnaround plan.
Mustapa said companies in general were eligible for three types of incentives from the Government - pioneer status, which gives companies tax incentives, a research and development grant and incentives for training.
He said the request from Proton was not unusual and that companies did approach the Government for tailored incentives and that the Government reciprocated by dangling certain carrots and benefits if deemed worthy.
The minister, however, said there were limitations as to whether incentives would be given. “These incentives are available depending on the Government’s financial situation,” he explained.
Mustapa said there were a number of considerations his ministry looked at when determining whether to grant funding. “We want to know if it fits into the country’s strategic direction. We also look at the merits of the case, the availability of funds at that point in time and we will do a thorough due diligence and cost-benefit analysis,” he said.
The report yesterday revealed that the national carmaker had first approached the International Trade and Industry Ministry last year for funding, but its request was turned down. The reason was that Proton couldn’t fully justify why it needed such funding from the Government.
It later approached Petronas, but Proton was not successful in raising the much-needed cash from the national oil company either.
Its difficulty in raising funds also comes at a time when the position of former Prime Minister Tun Dr Mahathir Mohamad as Petronas adviser is a talking point.
On Dec 2 last year, Dr Mahathir announced that he was quitting as adviser to Petronas. Subsequently, Prime Minister Datuk Seri Najib Tun Razak urged him to reconsider his decision.
Dr Mahathir’s role as adviser to Petronas is still up in the air. The former Prime Minister remains as adviser to Proton.
Meanwhile, Mustapa said Malaysia had implemented 88% of the measures needed for the regional integration under the AEC, while the overall implementation for Asean was at 72%.
He noted that one of the challenges for the AEC was non-tariff barriers. “We have abolished several non-tariff barriers,” he said, adding that Asean economic ministers had made reducing non-tariff barriers a priority for the AEC.
The AEC is the goal of regional economic integration among all 10 members of Asean by 2015. The objective is to remove barriers to trade in goods, services investments, capital and skilled workers to create a single duty-free market of over 600 million people and US$2.3 trillion in gross domestic product.
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