MOF wants Najib to answer for RM9.4b SSER projects

Finance Minister Lim Guan Eng has urged his predecessor and former prime minister Najib Abdul Razak to explain the suspicious transactions carried out for two government projects worth almost RM10 billion.

The two projects are the Multi-Product Pipeline (MPP) in Malacca worth RM5.35 billion, and the Trans-Sabah Gas Pipeline (TSGP) worth RM4.06 billion. Work for both began in April last year.

Lim revealed today that government has paid for almost 90 percent of the total project value, despite only 13 percent of both projects being completed.

“The total sum paid of RM8.25 billion constitutes a staggering 87.7 percent of the total project value.

“This is despite an average completion rate of only 13 percent with another two years of contracts to go.

“We have discovered that the payment schedule for the above contracts are based almost entirely on timeline milestones, and not on progressive work completion milestones,” he told a press conference at the ministry headquarters in Putrajaya today.

The projects were undertaken by Suria Strategic Energy Resources (SSER) – a fully-owned subsidiary of the Finance Ministry set up specifically for the projects on May 19, 2016.

Both projects are financed through an 85 percent loan from China's Exim Bank, and another 15 percent from the issuing of sukuk bonds, and secured with federal government guarantees.

'Najib, Irwan must answer'

Lim has since instructed his officials to lodge a MACC report on the “suspicious transactions” and demanded answers from those responsible.

“The (SSER) board of directors and (former Treasury secretary-general) Mohd Irwan Serigar Abdullah, in particular, must answer as to why SSER signed such a lopsided contract that clearly jeopardises the interest of the Malaysian people and government.

“In addition, we would welcome former finance and prime minister Najib, who has been active on Facebook recently, to explain how he could possibly approve these transactions,” he said.

Lim revealed that all the contracts were at that time negotiated exclusively by the Prime Minister’s Department without the involvement of Treasury officials.

“The Attorney-General’s Chambers also confirmed that these contracts were signed despite numerous unanswered questions and red flags raised,” he added.

Irwan Serigar, who is also SSER chairperson, had signed the agreement awarding both projects to China Petroleum Pipeline Bureau (CPPB) on Nov 1, 2016.

Besides these payments, SSER had also paid close to RM1 billion for two consultancy agreements with Chinese companies for the above projects.

In light of the involvement of Chinese companies, Lim appealed to the Chinese government for assistance in investigating possible money laundering in these projects.

The findings were made after going through the previously restricted “red files”, he said.

1MDB links?

Lim also stated that he harboured “strong suspicions” that these irregularities by SSER were linked to the 1MDB affair, with a link being established to former 1MDB subsidiary SRC International.

“I have been informed by my Treasury officials that SSER is an offshoot by the same people behind SRC International, a former subsidiary of 1MDB.

“SRC is the acronym for Strategic Resources Corporation, a name that is similar to SSER.

“It should be noted that the president of SSER is Mohammad Azhar Osman Khairuddin, who is also a member of the company’s board of directors. He is also a director of Putrajaya Perdana Sdn Bhd, a company linked directly with Low Taek Jho,” he said.

Going forward, Lim hoped the CPPB would hold up their end of the bargain and complete work that they had been paid for.

“Room for review is limited when you have already paid for 87.7 percent (of the project).

“We want (the contractors) to do as much as they can,” he said when asked. -Mkini