The Employees' Provident Fund (EPF) incurred heavy losses for two consecutive years from its investment in the light rapid transit projects, according to an opposition MP.

"According to the its annual report, EPF lost RM46.6 million in 1998, an increase of RM19.7 million from the loss in 1997," Husam Musa, the PAS MP for Kubang Kerian told Parliament today.

He claimed that most commercial banks refused to offer loans or invest in the (LRT) projects because of its low viability.

"The EPF invested in the Sistem Transit Aliran Ringan (STAR) by giving it more than RM632 million in loans and holds 20 percent equity in its shares," he said

However, Deputy Finance Minister Chan Kong Choy assured the House that the EPF investments and loans for both the STAR and Putra LRT projects will not be written off.

"The funds extended for the (LRT) projects were government support loans and concession agreements," Chan said.

"Therefore, the loans and investments are assured by the government," he said, adding that the losses will be settled when there is "profit".

Husam also said he was informed that the EPF also lost RM 77 million from its investment in Kuala Lumpur Stock Exchange.

With regards to the losses in KLSE, he enquired whether the allocation for EPF involvement in the stock market has increased from 10 percent to 30 percent.

To this, Chan replied EPF investments on KLSE stocks have indeed increased to 25 percent.

However, the deputy minister told the House that the EPF investments in the stock markets will go through stringent supervision by the Finance Ministry before approval.