Friday 29 Mar 2024
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The retail sector has been one of the worst-hit following the outbreak of the Covid-19 pandemic and the subsequent Movement Control Order (MCO). The Malaysia Retailers Association (MRA), in a statement released yesterday, appealed to the government for further concessions to help keep its members afloat during these trying times.

For starters, it wants the 15% discount on electricity bill to include those who hold a Public Distribution Licence with Special Agreement Tariff (as of now, these are not eligible for the discount) as a significant number of shopping malls fall under this category.

Under present conditions, all those with Public Distribution Licences are not eligible for the discount, effective from April 1 to Sept 30 this year. “A significant number of shopping malls, including retail shop lots, independent buildings and/or properties with retail businesses purchase bulk high voltage electricity and distribute it to their tenants under a distribution licence.

The MRA appealed to the government and Tenaga Nasional Bhd to grant malls and other retail-related properties which are operating on a Public Distribution Licence the same discount. so they can pass it on to their tenants.

“In addition, the MRA would like to request a discount of at least 50% for the next six months, irrespective of the kilowatt usage a month,” it said.

It justified the appeal by pointing out that according to recent articles in the local press, the national utility company can more than afford to take the hit. Firstly, it quoted one article which appeared in a local newspaper which pointed out that the government’s Kumpulan Wang Industri Elektrik (KWIE) fund has RM1.03 billion in reserves to support the electricity discount, but so far, only RM382 million has been allocated. “To this, TNB is only contributing RM150 million to fund the Government’s Covid-19 Stimulus Package. 

It added that TNB, which has a net profit of more than RM4 billion a year, has committed to its dividend payout policy of 40% to 60% when most global companies have suspended or reduced dividend payouts.

The MRA also wants to government to declare the Covid-19 outbreak in Malaysia the equivalent of a Force Majeure, that is a superior or overwhelming force (such as a catastrophe or natural disaster) that prevents one or both parties from fulfilling their contractual obligation, as was done in Singapore. This, it added, would provide businesses, unable to fulfil their contractual obligations, some temporary relief.

“The Covid-19 outbreak and the unprecedented MCO have had an unforeseeable economic impact, among other consequences. “It would be unfair to hold businesses strictly liable for their failure to meet their obligations and companies may have to pay damages or forfeit all their deposits besides facing the possibility of being sued and face lengthy litigation or possible insolvency.”

In addition, the MRA has called on the government to suspend or defer all Employee Provident Fund (EPF) contributions for six months starting April 2020. This too, would help businesses with cash flow instead of a monthly or mere 10- to 14-day extension, which it described as “preposterous” and “not workable”. 

The MRA summed up its list of appeals by pointing out that retail is a high fixed-cost business. “Paying electricity bills and rentals are two of our top three main concerns. Across the country, businesses are having difficulty staying afloat, with no revenue but many expenses to pay.”

And most of the retailers face a high possibility of business closure and staff layoffs. “In this unprecedented crisis, most, if not all, will have to make some sacrifice. We urge the government to seriously consider all our requests which will go a long way towards helping businesses lower their costs during the MCO period and the period after, when business will be slow.”

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