Return RM2.7b airbase relocation cost, Pua tells 1MDB

With its sale of Bandar Malaysia land parcels concluded, 1MDB must refund the government the RM2.7 billion payment for the airbases it was contracted to relocate as it is also planning to recoup the same amount in said transaction.

“This is very simply because the government had already paid 1MDB the RM2.7 billion relocation cost in full when the fund acquired the land in 2012,” said DAP national publicity secretary Tony Pua in a statement today.

In fact, noted the Petaling Jaya Utara MP, not only was 1MDB already paid in full, it also took an additional RM2.4 billion sukuk bond, of which RM1.63 billion has already been disbursed, to fund the same exercise.

But despite 1MDB receiving billions from the government and the loan, Pua claimed that only RM800 million of the relocation contract cost has been paid, with another RM1.9 billion is still outstanding.

Where did the money go?

“The question that 1MDB must answer is, where did all the billions of ringgit paid by the federal government and borrowed from financial institutions go?” he asked.

Pua argued that if 1MDB wants to recover the relocation cost from Iskandar Waterfront Holdings and China Railway Engineering Corporation, then it must refund the earlier government payment.

He based his assessment on the recent clarification by the sovereign fund with regards to the different transaction values announced for the Bandar Malaysia deal, with RM7.41 billion announced by 1MDB and only RM5.28 billion disclosed to regulators by China Railway Engineering Corporation on Jan 6, 2015.

Pua noted that 1MDB explained away the difference to provisions to recover the cost of the existing military airbase relocation projects, quoting the fund's clarifications:

“The main relocation contract and development agreement was executed between 1MDB and the Government of Malaysia for a contract value of approximately RM2.7 billion. This cost includes, amongst others, new land acquisition costs, construction costs, fit out/equipment costs and relocation costs.”

“It is the intention of 1MDB and the consortium to transfer the remainder PUKL Relocation construction costs... to the new special purpose vehicle”, of which 60 percent is to be acquired by the Iskandar Waterfront-China Railway Engineering consortium (IWH-CREC).”

'Gov’t must block deal'

Since the share sale and purchase agreement must receive the necessary consent from the government, Pua urged the authorities to withhold all approvals for the transaction unless 1MDB agrees that any relocation costs recouped and received by it will be channeled back to public coffers.

“It will be a major travesty if the Malaysian taxpayers had to foot the bill for the massive RM2.7 billion relocation cost, and yet 1MDB gets to profit from the taxpayers’ burden,” he said.

As it stands, the elected representative said that the federal government had already indirectly bailed out 1MDB by selling the Bandar Malaysia land “super-cheap” to it at RM1.6 billion which the sovereign fund resold at great profit to cover its “monstrous debts”.

“If the relocation costs, when recovered from IWH-CREC, isn’t refunded to the federal government, the Malaysian taxpayers would be cheated by a multi-billion-ringgit double-whammy as a result of the 1MDB catastrophe,” lamented Pua. -mkini