Rafizi Ramli wants the government to rethink Petronas' risky RM15.8 billion investment in Canadian shale gas.
UPDATED
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Rafizi said several companies that invested in shale gas had suffered losses amounting to billions of ringgit, including Canada’s biggest natural gas firm Encana Corporation, which was forced to write off its RM5.2 billion investment.
Other companies that suffered huge losses include British gas company BG Group, which was also forced to write off its RM3.9 billion investment and Australian company BHP, which suffered a loss of RM7.5 billion.
“The latest development raises many questions because Petronas was keen to invest in shale gas while other companies were suffering huge losses,” he told reporters here today.
“Never in our history has so much money been committed to a single venture as risky as this,” he added, slamming Petronas for conducting the “single, largest transaction ever made”.
Rafizi said Petronas had finalised its RM15.8 billion agreement with Progress Energy Resouces Corportation despite knowing of the financial losses suffered by the other three companies.
“The losses faced by Encana, BG Group, and BHP was made known when Petronas was negotiating the agreement with Progress Energy.
“Petronas should have been more careful when entering an industry that is suffering such huge losses,” he said.
Rafizi urged Petronas and Prime Minister Najib Tun Razak to immediately disclose to the public the status of the hefty investment.
“Has Petronas been forced to write off its investment like the other companies?” he asked.
“Has Petronas been forced to write off its investment like the other companies?” he asked.
“This episode raises many questions and proves that there needs to be a stricter monitoring committee overseeing Petronas’ investments and not handed over entirely to the PM,” he said.
“I will continue to raise facts and analyses on this investment so that the PM can respond accordingly,” he added.
Largest toll concessionaires are GLCs
On a separate matter, Rafizi dismissed Minister in the PM’s Department Abdul Wahid Omar’s statement that a hike in toll rates next year was unavoidable as it is an express condition in the concession agreement between the government and highway concession companies.
On Saturday, Abdul Wahid reportedly said the toll rate should have been revised in 2011, as stated in the concession agreement.
“What has been hidden from the public’s view is that most of the largest toll concessionaires in the country are government-linked companies (GLCs),” said Rafizi.
“This is the case of left pocket to right pocket transaction,” he added.
According to Rafizi, the North-South Expressway Project is wholly-owned by government funds such as Khazanah Nasional Bhd and the Employees’ Provident Fund (EPF).
The second largest operator Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) – which operates the Ampang-Kuala Lumpur Elevated Highway and Guthrie Corridor Expressway – is wholly-owned by Putrajaya’s fund
manager Permodalan Nasional Bhd.
manager Permodalan Nasional Bhd.
Lastly, Gamuda Bhd – which operates the Damansara-Puchong Expresswayand the Sprint Highway – is the only privately-owned firm, but 22.59% of its shares are held by government funds such as EPF, Tabung Haji, and others.
“BN argues that because it is a privatised project, private toll concession holders have to bear huge interest charges and not increasing toll rates will impact their profitability,” he said.
“That statement is misleading because the government has thrown in so many goodies and financial assistance to these companies, so much so, throughout construction they have been receiving subsidies from the government.”
Rafizi said that because subsidies handed out, the Federal Government is a major stakeholder in these companies “even if they don’t have majority control” of them.
“As such, the rates can be negotiated. Given the level of profitability and that the companies are government owned, the decision to increase toll rates is not wise,” he said.
Rafizi said he will be disclosing the profitability of these companies and the average daily traffic report during a press conference tomorrow.
“Traffic has gone up so much more than the financial projections they had when they entered into the concession agreement. This is actually a lot more favourable to them.”
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