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Wednesday, January 9, 2013

Explain why Ropiaah's firm was not sacked & RM72mil performance g'tee not exercised - Rafizi to Zahid


Explain why Ropiaah's firm was not sacked & RM72mil performance g'tee not exercised - Rafizi to Zahid
PKR strategy director Rafizi Ramli has shot back at Defense Minister Zahid Hamidi, asking him to explain why his ministry failed to exercise a land bond, or performance guarantee, worth RM72.5mil after Selangor Umno Women's chief Raja Ropiaah failed to deliver on a privatization project involving 223 acres of land in Bukit Raja, Selangor.
Zahid had on Tuesday defended his ministry's decision to award the project to build the Puspahanas military research center to Ropiaah's firm Awan Megah in 2006. The minister had also denied embroiling public-listed firm Boustead Holdings Bhd in the ensuing scandal, arguing that it was an arms-length and commercial decision by Boustead to decide to take over the project by paying Ropiaah's firm RM130 mil and controversial businessman Deepak Jaikishan RM30 mil.
"If the deal is so (above board) why was the land bond not exercised? That is as good as forfeiting RM72.5 million. By right, the Defence Ministry has every right to liquidate the bond and appoint a new contractor to finish the project,” Rafizi told a press conference on Wednesday.
RM110 mil more than Ropiaah's estimated costs & RM57mil more than land bond value
Rafizi also pointed that the amount of the performance guarantee issued by the Kuwait Finance House was important to cover the Ministry as only 2 out of 12 of the main buildings in the Puspahanas project was being constructed since the project was begun.
Rafizi, a UK-trained auditor, had taken members of the press to the Puspahanas site on Tuesday and has estimated the total costs and investments put in by Ropiaah did not exceed RM20mil. Furthermore, the project was found to be in Putrajaya Precinct 1, not on the 223 acres of land in Buit Raja, Selangor, on which it had initially been intended.
He also slammed Zahid and Prime Minister Najib Razak for allegedly 'using' the pension money of the military servicemen via Boustead to benefit Ropiaah and to "silence" Deepak, a former close friend of Najib's wife Rosmah Mansor. In the past few weeks, Deepak has reeled off a string of corruption allegations against the first couple. Boustead is 61% owned by LTAT, the pension fund of the armed forces personnel.
At RM130mil, the payment to Ropiaah's Awan Megah would be RM110 mil more than her costs and investments and some RM57mil more than the performance bond itself, Rafizi pointed out.
Why was Awan Megah not sacked and instead Boustead has to buy out Ropiaah for RM130mil
According to the land bond issued by the Kuwait Finance House dated 4 February 2008, it was stated under clause 10 that "this Guarantee shall expire on 3rd February 2011. Claims, if any, must be made in writing and received by us on or before 3rd February 2011, after which date it is automatically cancelled and shall be considered null and void ..."
"If the Ministry has extended the bond, then they should make that information public," said Rafizi.
The PKR leader also pointed out the under the terms of the privatization agreement, the Ministry had the right to sack Awan Megah and appoint a new contractor to finish the project, which is altready overdue.
"This is the problem with all the privatization programs under the BN. The agreements are written to benefit the people who get the contracts and not to protect public interests. Once you get a contract, you can rush out and sell the land. It doesn't seem to matter if the project is completed or not," said Rafizi.
The start date of the Puspahanas project was 25 September 2008 and the completion date 24 January 2011. However, during a site visit with the press to Puspahanas, there fewer than 10 construction workers clad in yellow hard hats working on the project, which Zahid insists is still going ahead.
Zahid had blamed a land swap deal gone wrong instead of Awan Megah. "Right now, Puspahanas in Putrajaya is in the construction phase. We’ve been monitoring it because it is a privatisation deal. Progress reports have been delivered to me, and we have targeted its completion date. We target a completion date of mid-2015, at the very latest,” said the minister.
Malaysia Chronicle

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