The Finance Ministry (MoF) has just discovered another multi-billion-ringgit scandal that was kept under wraps by the previous government and boy, it sure looks fishy!
After gaining access and scrutinising the hidden “red files” that were kept away from most officials in the Treasury, Finance Minister Lim Guan Eng found two gas line projects that amounted to RM9.4 billion. In the press statement, he said that 88% of the amount or RM8.3 billion had been paid but only about 13% of the work had been completed. It sure doesn’t sound good!
These projects are known as the Multi-Product Pipeline (MPP) and the Trans-Sabah Gas Pipeline (TSGP), which were approved by the cabinet on July 27, 2016. The Star reports that Suria Strategic Energy Resources Sdn Bhd (SSER) handled these projects.
Haven’t been clued-in on this shocking new scandal? Here’s what you need to know:
Who or what exactly is SSER?
According to the Finance Minister, SSER is an off shoot of SRC International, a company under the scandal-ridden 1Malaysia Development Bhd (1MDB). SSER was established on May 19, 2016 and is a wholly-owned unit of the MoF.
What are the projects involved?
As mentioned above, the two projects are gas line projects that started in April 2017 but as of March 2018, only about 13% of the work had been completed but this has not been verified. Why so slow? Simply put, the MPP is a 600km multi-product petroleum pipeline connecting Melaka and Port Dickson to Jitra, Kedah which costs 4.53 billion yuan and RM2.53 billion, or approximately RM5.35 billion.
Meanwhile, the TSGP is supposed to build a 662km gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau, costing 3.08 billion yuan and RM2.14 billion, or approximately RM4.06 billion. These two projects amount to RM9.4 billion, which were given to the China Petroleum Pipeline Bureau (CPPB) on Nov 1, 2016 and are suppose to run for three years.
Treasurer-General, Tan Sri Irwan Serigar Abdullah signed the documents while he was the chairman of SSER too. However, Irwan has resigned on May 23. SSER got their funding from China Exim Bank amounting to 85% of the project value on March 22, 2017 while the balance of the 15% funds required were to be raised via sukuk issuance. These fundings were secured with Federal Government Guarantees.
Lim said that there was an extra RM1 billion as well, which includes two consultancy agreements signed for the same projects worth about RM312 million and RM213 million, and a maintenance agreement worth RM476 million, awarded to companies from China.
What is happening now?
“We have discovered that the payment schedule for the above contracts is based almost entirely on timeline milestones, and not on progressive work completion milestones. Worse, based on the agreements signed, 85 per cent of the project value would be paid by March 1, 2018,” Lim said.
“RM4.71 billion has been paid to CPPB for the MPP and RM3.54 billion for the TSGP. This is something that is shocking to us at the Treasury,” Lim said. The projects were directly negotiated with the Prime Minister’s Department during Najib’s administration.
“The president of SSER is Datuk Mohammed Azhar bin Osman Khairuddin, who is also a company director. He is also on the board of Putrajaya Perdana Sdn Bhd, a company with direct ties to Mr Low Taek Jho,” Lim added. Yes, that Mr Low almost every Malaysian is looking for!
A report has been filed with the Malaysian Anti-Corruption Commission (MACC) over the highly suspicious agreements and Lim will also inform Prime Minister Tun Dr Mahathir Mohamad about this scandal. Lim has called on Irwan to answer why they signed such a lopsided contract that did not benefit Malaysia.
He added, “We would welcome the former Finance and Prime Minister, Dato’ Seri Najib Razak who has been active on Facebook recently, to explain how he could possibly approve the above transactions.” Yeah, we would all like to know as well! The MoF is also considering to ask for China’s assistance to determine the possibility of money laundering.
As if the 1MDB scandal is not enough, here comes another one! Is there no end to the money scandals?
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