Ministry incurred RM500m loss in land swap deal

KUALA LUMPUR: The Defence Ministry yesterday revealed that it had suffered a half a billion ringgit loss in a land swap deal involving development projects.

It is believed that the losses involving the deal had taken place since 1997.

The matter came to light following the tabling of an investigation undertaken by the Governance, Government Acquisitions and Finance Investigating Committee chaired by Tan Sri Ambrin Buang on Jan 28, said Defence Minister Mohamad Sabu.

“The losses and leakages comprised 16 land swap projects, involving 1,199ha of land belonging to the Defence Ministry valued at RM4.7 billion and with a project cost of RM4.8 billion.

“The committee also found that the loss estimate throughout the project implementation period involving the land swap deal stood at more than RM500 million.

“We were informed that the majority of the land swap project implementation was not carefully planned and the selection of the developer company was also not properly implemented,” he said here yesterday.

Mohamad said there was evidence of political interference in regard to the choice of the land swap location, which was believed to have been done for the political interest of certain quarters.

“This had caused part of the project to exceed the previously agreed-upon contract periods.

“It was also found that part of the project, which had been completed, was done so with unsatisfactory construction quality.”

He said the investigative report was tabled and accepted by the cabinet on Feb 13.

“I had instructed officers in the Defence Ministry to lodge reports with the police, Malaysian Anti-Corruption Commission and other agencies to conduct investigations and undertake any action as provided by the law.

The land swap issue involving the ministry arose after former international trade and industry minister Tan Sri Rafidah Aziz claimed that the ownership of more than 40,000ha of the ministry’s land was transferred to a company owned by three individuals without an open tender.

She made the allegation in an open letter addressed to former prime minister Datuk Seri Najib Razak on April 8 last year.

Among the properties mentioned in her letter were the Sungai Besi Royal Air Force Base (RMAF) and the Majidee Camp in Johor Baru.

She claimed the proposal was made to the then government in 2007 via a cabinet paper, and that it had been approved and executed.

The Defence Ministry, on April 18 last year, had said there was no truth to Rafidah’s claims.

It insisted its management of federal land was open and transparent.

It said the claim that federal land used by the ministry was transferred to a company owned by these three individuals was also untrue.