• The government is trying to hide RM30b of spending by Pembinaan PFI Sdn Bhd which was had the 3rd largest liability in 2012 among all government owned companies

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 13th of November, 2014

    The government is trying to hide RM30b of spending by Pembinaan PFI Sdn Bhd which was had the 3rd largest liability in 2012 among all government owned companies

    According to the latest Auditor General Report 2014, Series 3, a little known Ministry of Finance owned company – Pembinaan PFI Sdn Bhd – had racked up liabilities of RM27.8 billion as of 2012 making it, then, the company with the 3rd largest liability among all government owned companies after Petronas and Khazanah (See Figure 1 below).1

    Figure 1: Top Three Government Owned Companies with the largest liabilities as of 2012

    However, unlike Petronas or Khazanah, which were the two most profitable government owned companies in 2012 (See Figure 2 below), Pembinaan PFI Sdn Bhd does not have its own revenue stream and hence, profit generation capabilities.

    Figure 2: Petronas and Khazanah as the top two most profitable government owned companies as of 2012

    According to its company filings, the nature of Pembinaan PFI’s business is to “source for financing to undertake government projects”. According to an extensive report in the Edge, PFI was set up to disburse RM20b worth of spending under the 9th Malaysian Plan which ran from 2006 to 2010.2 In addition, preference for the contracts under PFI would be given to small scale bumiputera contractors.

    Up till today, there has been very little transparency about how exactly this RM20b has been spent and also the terms of the concession agreements between the contractors and the governments for the rental or lease of the buildings constructed under PFI. There is not even a website for Pembinaan PFI! In contrast, for example, Pembinaan BLT Sdn Bhd, which was set up in 2005 as a special purpose vehicle to construct police offices and staff quarters which would then be leased back to the government, not only has a website but lists out all of the buildings which it has completed since 2008.3

    The recent AG’s report also highlighted that a 2nd round of funding worth RM10b had been allocated to PFI out of which RM7.57 billion had been set aside for 16 Ministries / Agencies to undertake 313 projects. As of 31st December, 2013, a total of RM4.9b has been spent from this 2nd tranche of funding. According to the company filings of Pembinaan PFI Sdn Bhd, all of its borrowings come from the Employees Provident Fund (EPF).

    What is more worrying is the fact that the government has tried to hide this spending from the budget. The government set up a convoluted agreement whereby 186 parcels of land owned by the Federal Lands Commissioner was leased to PFI after which the Federal Lands Commissioner was asked to sub-lease this land back from PFI with half yearly payments from 2012 to 2027 totalling RM29.2billion (Appendix 1 below). PFI would then use these payments from the Federal Lands Commissioner to service the interest payments to EPF. This land lease agreement (attached in the email) is important because the land ‘owned’ by PFI is listed as part of its assets. This is why the recent Auditor General’s report also showed PFI has have the 3rd largest asset holdings among all government owned companies, after Petronas and Khazanah (Figure 3 below). In reality, these ‘assets’ are merely land holdings which PFI itself doesn’t really own but were leased from the Federal Lands Commission.

    Figure 3: Top Three Government Owned Companies with the largest assets as of 2012

    I call upon the Finance Ministry to disclose the full list of projects and the cost of each project that was awarded by Pembinaan PFI and to ensure full transparency for future projects. I also call upon the Auditor General to conduct a thorough investigation into Pembinaan PFI including whether government Standard Operating Procedures (SOPs) were followed in the awarding of its contracts.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    Attachment A: PFI Forum Article in The Edge, 2006 

    Attachment B: Pembinaan PFI Sdn Bhd Agreement with the Federal Land Commissioner

    Attachment C: Pembinaan PFI Sdn Bhd Company Profile, 11 Nov 2014

    Appendix 1: Schedule of payments from the Federal Land Commission to Pembinaan PFI Sdn Bhd

    1 If the same exercise was done for 2013 accounts, 1MDB would probably occupy the third spot.

    2 http://www.mbam.org.my/mbam/images/MBJ3Q06(pdf)/@PFIforum.pdf

    3http://www.pblt.com.my/ver4/project.html
  • Why did the Ministry of Urban-Well Being, Housing and Local Government give a new 3 year contract worth RM3.56 million to the same company, XCN Technology, to continue to mismanage the Pangkor incinerator?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 12th of November, 2014

    Why did the Ministry of Urban-Well Being, Housing and Local Government give a new 3 year contract worth RM3.56 million to the same company, XCN Technology, to continue to mismanage the Pangkor incinerator?

    The recently released report by the Parliamentary Accounts Committee (PAC) on the construction and management of four small scale waste incinerators in Pangkor, Langkawi, Cameron Highlands and Pulau Tioman was a damning indictment on the authorities involved in approving the contracts for the construction of these incinerators.

    The PAC found that the Ministry had failed in its responsibility to do the proper due diligence in selecting the technology proposed by XCNT especially given that past prototypes used by the same company in the Kuala Terengganu City Council (MPKT) had failed and the prototype in UiTM Shah Alam was only burning waste paper. The PAC also found that the experts from UTM and from the Malaysian Industry Government Group of High Technology (MiGHT) also failed their responsibility in evaluation XCNT’s technology.

    The PAC also recommend that the appropriate action be taken against the errors made by the Secretary General of the Ministry for Housing and Local Government, the Director of the National Solid Waste Management Department, XCNT in its capacity as the main contractor, and Prof Dr Rozainee Taib from UTM and Dr Sivapalan Katsiravale, Principal Analyst from MiGHT who were involved in selecting, planning and implementing these incinerator projects.

    The Auditor General’s Report 2012 also revealed significant shortcomings in the operation of the Pulau Pangkor Incinerator. On the 15th of September 2014, members of Kami Tak-Nak Insinerator (KTI), an NGO which is campaigning against the proposed incinerator in Taman Beringin, Kepong, visited the Pulau Pangkor incinerator and found that the problems identified in the National Auditor’s report such as the failure to separate waste before incineration and the improper disposal of the fly and bottom ash were still present. (See pictures in Figure 2 below)

    Despite the continued shortcomings of the XCNT in managing the Pulau Pangkor incinerator, it was given a three year contract by the Ministry of Urban-Well Being, Housing and Local Government starting from 2014 which totals RM3.56m to continue to operate this incinerator. (See Figure 1 below)

    Figure 1: Three year contract worth RM3.56m given to XCNT starting from 2014

    The awarding of the contract to operate and maintain the Pulau Pangkor incinerator shows a complete disregard of the blatant flouting of environmental standards by XCNT by the Ministry of Urban Well Being, Housing and Local Government and demonstrates that the Ministry has no regard to the well-being of the residents in Pulau Pangkor. Despite the Auditor General’s report and the PAC meetings, it seems that the Ministry has not learned its lessons and continues to operate as before.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    Figure 2: Photos taken from the Pangkor Incinerator visit on the 15th of September 2014


    Mountains of trash piling up at the incinerator site


    Unsorted rubbish inside the incinerator compound


    Accumulation of bottom ash at the Pulau Pangkor incinerator

  • 10 reasons not to trust Dato’ Abdul Rahman Dahlan, Minister for Urban Well-Being, Housing and Local Government on the Building of Incinerators in Malaysia

  • Najib’s assurance that Sabah and Sarawakian Christians will not be affected by the Court of Appeal ruling on the ‘Allah’ verdict has proven to be completely undependable and unreliable

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 31st of October 2014

    Najib’s assurance that Sabah and Sarawakian Christians will not be affected by the Court of Appeal ruling on the ‘Allah’ verdict has proven to be completely undependable and unreliable

    In October 2013, after the Court of Appeal’s verdict on the right of the Herald newspaper to use the word Allah in its publication, Najib assured Christians in Sabah and Sarawak that the decision would not affect the Christians in Sabah and Sarawak as per the 10 point agreement issued by the Federal Cabinet.[1]

    However, it was reported yesterday, on the 30th of October, that ‘hundreds of compact discs (CDs) and books containing the word “Allah” were confiscated at the KLIA2 airport last Saturday.’ It was further reported that these items belonged to a Sabahan Christian who had brought them in from Medan, Indonesia, on his way back to Sabah where he lives.[2]

    If this report is true, then it proves that Najib’s assurances to the Christian community in Sabah and Sarawak are completely undependable and unreliable. This confirms the view of the Sarawak Minister’s Fellowship that ‘there is no basis for Najib to give assurance on Allah.’[3] The confiscation of this Christian material containing the word Allah once again shows that the Christians in Sabah and Sarawak have no assurance that bibles printed in Indonesia and imported to Malaysia through KLIA or any other airport will not be confiscated by the federal authorities, as a result of the Court of Appeal ruling on the use of the word Allah as ‘not being an integral part’ of the Christian faith.

    This confiscation also shows the complete failure of the federal government to protect Freedom of Religion as per Article 11 (1) of the Federal Constitution. It also shows the failure of the federal government in trying to keep up the pretense of having an inconsistent promise of ‘one country, two systems’ for having one set of laws for Peninsular Malaysia and another set of laws for Sabah when it comes to something as fundamental as our constitutional rights to practice our religion freely.

    I call upon the Prime Minister to order the Home Minister to release the material belonging to the Sabahan Christian immediately. I also call upon the Prime Minister to order the Home Minister not to appeal against the High Court decision for the Home Ministry to return the Christian CDs belonging to Jill Ireland and for the immediate return of these CDs.[4] The failure to do so would only confirm that the Prime Minister is a ‘toothless tiger’ who is incapable of ensuring that his own Ministers implement the Prime Minister’s promises to the people.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.malaysiakini.com/news/244475

    [2] http://www.themalaymailonline.com/malaysia/article/in-latest-allah-incident-christian-cds-and-books-seized-at-klia2

    [3] http://www.barubian.net/2014/06/no-basis-for-najib-to-give-assurance-on.html

    [4] http://www.themalaymailonline.com/malaysia/article/no-release-of-christian-cds-while-ministry-appeals-jill-ireland-ruling

  • Explain why GLCs and Government Owned Companies are not paying back government loans

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 29th of October 2014

    Explain why GLCs and Government Owned Companies are not paying back government loans

    Yesterday, I asked why the government was not going after private companies which had failed to service their government loans running into millions of ringgit. Today, I highlight the fact that even GLCs and government owned companies are not paying back their loans from the federal government.

    Table 1: Arrears, Repayment due, Amount Repaid, Loan Write-off / Rescheduled and Outstanding Loans from the Federal Government to GLCs / Government Owned Companies (2012)


    Source: National Audit Report 2012, Statement of Memorandum Account of Recoverable Loans 2012.

    Table 1 above shows the list of government controlled companies which had outstanding repayment arrears in 2012 due to failure to service their loans from the federal government. The total arrears for these government controlled companies was RM1.3 billion at the end of 2012. They were supposed to pay RM640.4m in repayments in 2012 but only managed to pay RM221.98m (35%). At the end of 2012, these companies had outstanding federal loans totaling RM4.5b.

    The companies which failed to adequately service their government loans include the Indah Water Konsortium (IWK) which failed to service a single sen of its RM165.58 million repayment in 2012 and had an outstanding loan of RM1.94 billion at the end of 2012 which has since increased to beyond RM2 billion. It includes a number of companies that registered profits in their latest company filings such as Cyberview, the master developer for Cyberjaya, with after-tax profits of RM4.7m in 2013; Malaysian Debt Ventures with after-tax profits of RM23.7m in 2013; Composites Technology Research Malaysia (CTRM) with after-tax profits of RM12m, in 2012.

    The failure of these government owned companies raises two questions.

    Firstly, why does the government lack the internal processes to ensure that these companies, especially those which are profitable, adequately service their government loans? Why do these companies seem like they are getting a ‘free pass’ while millions of other PTPTN borrowers are given far harsher treatment including the possibility of a credit blacklist? Why have inconsistent standards for people and companies which owe money to the federal government?

    Secondly, for the companies which may have difficulty servicing their government loans because of poor cash flow, poor profitability and negative reserves, how much will the government continue to spend in order to ‘bail out’ these companies such as IWK which registered a loss of RM213m and had negative reserves of Rm1.2b with a share capital of only RM100m? Why is the government inconsistent in wanting to exert financial discipline on PTPTN borrowers while at the same time, it continues to bail out these government owned companies?

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

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