Business sense for politicians?

Maximising returns on assets.

One of the ways the government wants to raise revenue is to maximise returns on its assets. Wow, sakmongkol exclaimed- is this something revolutionary coming out from the finance minister?

How?

By way of maximizing returns on its assets, including land that has not been developed, especially those in strategic locations. He cited the Rubber Board land in Sungai Buloh as well as government land in Jalan Cochrane and Ampang Hilir in Kuala Lumpur as examples. Tenders will be opened to private companies and GLCs to develop the parcels of land based on guidelines set by the government.

Provided of course, it is done through open tenders like the government has pledged and the government has the political will to see the sale of the assets through.

Now, sakmongkol is thinking the same strategy needs to be adopted by his state of Pahang. The strategy to maximise returns on its assets- such as timber concessions.

Every year, the state government loses millions of revenue:-

1. through understating the actual tonnage felled.
2. Loss of revenues through blatant theft of timber.
3. Rampant corruption such as collusion to under declare actual tonnage by forestry officers.
4. Under declaration of tonnage on the ground thereby reducing revenue accruable to the government..

Suppose now, the government bans private logging absolutely and its place carry out the following strategy:-

1. For each district in Pahang, the government appoints registered and approved contractors to fell down trees. There will be certain range of rates per ton depending among other things, the nature of the physical terrain from which timber is to be extracted.
2. For each district in Pahang, the government establish bonded timber yards or mattaus. All felled trees will be brought into the bonded stockyard.
3. Sale of timber to be done openly. Lumber yards, private buyers can come from to the bonded stockyard to purchase whatever timber they want.
4. They pay premium/duties/taxes upon exit from the bonded lumber yard.

What can we achieve from this strategy?

1. The first is of course we can maximize returns from our assets (timber concessions).

2. Prevent theft of timber- anyone felling tress other than approved contractors must by default be thieves and can be prosecuted. In Thailand, they shoot tree poachers on site.

3. Prevent wastage- selected trees only will be cut

4. Allow an open market for the sale of timber

5. Eliminate timber kings who obtained concessions through dubious means.

Maybe the Pahang government will look into this proposal. It is in line with the federal government’s efforts to increase income by maximizing existing assets.