Putrajaya in cover-up of obscure firm’s RM30 billion spending, says DAP

Schedule of payments from the Federal Land Commission to Pembinaan PFI Sdn Bhd, as cited by DAP's Ong Kian Ming from the latest Auditor-General's Report. – November 13, 2014.

DAP lawmaker Ong Kian Ming has accused Putrajaya of trying to conceal some RM30 billion worth of spending by a little-known company owned by the Finance Ministry.

Ong (pic) referred to the Auditor-General's Report 2013, which showed that Pembinaan PFI Sdn Bhd had racked up liabilities of RM27.8 billion as of 2012, making it the 3rd largest liability among government-owned companies after Petronas and Khazanah Nasional.

"However, unlike Petronas or Khazanah, which were the two most profitable government owned companies in 2012, Pembinaan PFI Sdn Bhd does not have its own revenue stream and hence, profit generation capabilities," the Serdang MP said in a statement today.

"According to its company filings, the nature of Pembinaan PFI’s business is to 'source for financing to undertake government projects'.

A report by The Edge had revealed that PFI was set up to disburse RM20 billion worth of spending under the 9th Malaysian Plan (2006-2010) and that contracts under PFI would be preferably 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," said Ong.

The third series of the A-G's report this year, Ong noted, had highlighted a second round of funding worth RM10 billion to PFI, of which RM7.57 billion had been set aside for 16 ministries or agencies to carry out 313 projects.

The report showed that as of December 31, 2013, a total of RM4.9 billion was spent from this second tranche of funding.

"According to the company filings of Pembinaan PFI Sdn Bhd, all of its borrowings come from the Employees Provident Fund (EPF)," Ong said.

"What is more worrying is the fact that the government has tried to hide this spending from the budget.

"It 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," he added.

He said PFI would then use these payments it got from sub-leasing the land to service the interest payments to EPF.

"This land lease agreement is important because the land ‘owned’ by PFI is listed as part of its assets. This is why the recent A-G’s report also showed PFI to have the third largest asset holdings among all government owned companies, after Petronas and Khazanah.

"In reality, these ‘assets’ are merely land holdings which PFI itself does not really own but were leased from the Federal Lands Commission," he said, adding that Putrajaya should disclose the full list of projects and the cost of each one awarded by PFI to ensure full transparency.

- TMI