Malaysia's Finance Ministry discovers no land, no Petronas greenlight in S$3.1b oil project scandal

KUALA LUMPUR — The Najib administration paid out 88 per cent of RM9.4 billion (S$3.1 billion) for two oil-related projects despite not having obtained the necessary rights from oil giant Petronas or the land required, Malaysia's Finance Minister Lim Guan Eng disclosed on Wednesday (June 13).

Mr Lim was referring to the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects, which was recently discovered to have only had been completed by 13 per cent by the Chinese firm contracted to do so.

"Worse, we have since discovered that SSER has failed to secure any rights from Petronas as required by law to lay the pipes for MPP, and has also failed to acquire the necessary land in Sabah to do the same for TSGP," he said in a statement on Wednesday.

Mr Lim was referring to the Finance Ministry's subsidiary Suria Strategic Energy Resources (SSER), which had awarded the two projects worth RM9.4 billion to China Petroleum Pipeline Bureau (CPPB).

"Despite such shocking revelations, Datuk Seri Najib still claims that all the necessary processes, procedures and laws had been complied with in relation to the signing of these two pipeline projects," he added, referring to former prime minister Datuk Seri Najib Razak who was also the finance minister when the alleged scandal took place.

Last Tuesday, Mr Lim revealed the discovery of the new RM9.4 billion scandal that was hidden away in the Finance Ministry's "red" files that were inaccessible by even the auditor-general.

The scandal revolves around both the RM5.35 billion MPP project for a 600km-long multi-product petroleum pipeline linking Melaka and Port Dickson to Jitra, and also the RM4.06 billion TSGP project in Sabah to build a 662km-long gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau.

Mr Lim said that RM8.3 billion or 88 per cent of the RM9.4 billion value has been disbursed, even though the MPP and TSGP projects were recorded as having only 14.5 per cent and 11.4 per cent of the works completed by the end of March 2018.

These completion rates have also yet to be verified and audited, Mr Lim said.

On Wednesday, Mr Lim continued to question Mr Najib over the alleged RM9.4 billion scandal, claiming that the latter had "deliberately refused to respond" to the key question of why the RM8.3 billion payment was made despite only an average of 13 per cent work completion.

"Why did he permit such disbursement to be made within the first year of a three-year contract?" Mr Lim asked.

Lim on Wednesday said it has since been discovered that the then-minister in the Prime Minister's Department Abdul Rahman Dahlan had for some reason always presented the SSER projects and the East Coast Rail Link (ECRL) project for the Cabinet's approval in the same Cabinet paper.

"This raises red flags as the ECRL and the SSER projects are vastly different in nature and business, involving different companies, contractors and geography, even if they were financed by the same China EXIM Bank," he said. MALAY MAIL