LIM REVEALS RM9.4B GAS PIPELINE SCANDAL
88pc paid, but only 13pc completed, says minister
THE Finance Ministry yesterday revealed what is said to be another scandal in two projects worth RM9.4 billion under a company linked to 1Malaysia Development Bhd and its former subsidiary, SRC International Sdn Bhd, discovered in the ministry’s “red files”.
Its minister, Lim Guan Eng, said 88 per cent of the value of the two pipeline projects under Suria Strategic Energy Resources Sdn Bhd (SSER) had been paid, even though only 13 per cent of the work had been completed.
He said the multi-product pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects, valued at RM9.4 billion, were awarded to China Petroleum Pipeline Bureau (CPPB) on Nov 1, 2016, adding that the agreements were signed by former Treasury secretary-general and SSER chairman Tan Sri Dr Mohd Irwan Serigar Abdullah.
“Payments were based on a timing milestone, not progressive work done, resulting in RM8.3 billion being paid, or 88 per cent of the project value, when only 13 per cent of work had been completed.
“Based on the suspicious transaction above, I have instructed my officers to file a report with the Malaysian Anti-Corruption Commission last week. Prime Minister Tun Dr Mahathir Mohamad has been briefed.”
Lim said he informed Treasury officials that SSER, a subsidiary wholly-owned by the Finance Ministry, was “an offshoot of SRC International”.
“It should be noted that SSER’s president is Datuk Mohammed Azhar Osman Khairuddin, who is a Putrajaya Perdana Bhd director, a company linked to Low Taek Jho.”
He said it was impossible to review the projects as 88 per cent of their value had been paid.
“We have to continue and ensure that they are completed.”
Lim said SSER had secured funding amounting to 85 per cent of the project value from the Export-Import (Exim) Bank of China and 15 per cent through sukuk issuance.
“The Exim Bank of China borrowings and sukuk are secured with Federal Government guarantees.”
He said he was shocked to discover that RM4.71 billion and RM3.54 billion had been drawn down for MPP and TSGP respectively and paid to CPPB.
He said if necessary, the government would seek assistance from the Chinese government to trace the flow of funds in China to look into the possibility of money laundering being involved.
He said Irwan and former prime minister Datuk Seri Najib Razak, who was finance minister, must explain how the transactions were approved.
The RM5.35 billion MPP involves the building of a 600km multi-product pipeline that connects Melaka and Port Dickson, Negri Sembilan, to Jitra, Kedah, while the RM4.06 billion TSGP involves building a 662km gas pipeline from the Kanis Gas Terminal to Sandakan and Tawau in Sabah.