Govt commitment helps to reduce Felda’s financial burden: chairman

KUALA LUMPUR – The government’s commitment to guarantee up to RM9.9 billion for the Federal Land Development Authority (Felda) to issue sukuk can help reduce the financial burden on the organisation, said its chairman.

Datuk Seri Ahmad Shabery Cheek said the guarantee is a big boost to Felda in its efforts to carry out its transformation as well as helping the settlement of settler debts.

“Under the unity government, there is clearly an agreement that the government will help Felda to repay the sukuk.

“The government’s confirmation through this guarantee makes Felda happy and provides relief to all Felda settlers,” he said after the Ruang Bicara programme titled “Felda’s Transformation Prospering Settlers” on Bernama TV last night.

On July 9, the Finance Ministry announced that beginning this year, the government has allocated up to RM1 billion a year to enable the redemption of Felda sukuk which, among other things, finance settlement debt write-offs.

The ministry said in a statement on June 28 that Prime Minister Datuk Seri Anwar Ibrahim, who is also finance minister, had signed an agreement involving a government guarantee to Felda to restructure the agency’s loan with a large part involving the reduction of the principal of Felda’s debt with financial institutions by RM7.9 billion.

The agreement will, among other things, reduce Felda’s financial costs against the interest rate charged and enable Felda to cancel 80% of the settlers’ debt amounting to RM8.3 billion.

In the meantime, Shabery said Felda will begin to focus on efforts to upgrade the capabilities of the digital economy in all its regions.

The things he will focus on include ensuring that the infrastructure of internet access and connectivity throughout the Felda region is improved so that it can generate the potential of e-commerce and the gig economy.

“The first thing I will do as chairman after this is to go to the field to see for myself how the telecommunication infrastructure is in the entire Felda area as well as the efforts that can be made to improve the marketing of Felda products,” he added. – Bernama, July 12, 2023