The Malaysian Insider – 17 hours agoRELATED CONTENT
- Explain ‘mind-boggling’ RM29.2 billion rental deal, Putrajaya told
DAP is demanding that Putrajaya explain a "mind-boggling" deal it had structured with a little-known company owned by the Finance Ministry, which sees it sub-leasing land it already owned for RM29.2 billion.
Serdang MP Ong Kian Ming said that Pembinaan PFI Sdn Bhd had signed an agreement with the Federal Lands Commission (FLC) where the latter would lease PFI 186 plots of land all around the country.
"FLC would then sub-lease this land from PFI by paying rental for land which the FLC already owns," he said in a statement today.
"In other words, the government is sub-leasing land which it itself owns by paying rental. It's like me leasing an apartment which I already own to my wife and then sub-leasing it from her by paying her rental.
Ong said the "complicated and mid-boggling deal" was structured to pay back the Employees Provident Fund (EPF), which is where PFI had obtained loans from.
"The rental from the FLC to PFI are spread out into 30 payments over 15 years starting from the February 15, 2013, all the way up to the August 13, 2027. The total rental payments add up to RM29.2 billion.
"I call upon the Finance Ministry to explain why it structured this deal where the government has to pay itself rental on land which it already owns. Is the purpose of this agreement to hide government expenditure from the budget so that our deficit would seem as if it is decreasing?" he asked.
Ong previously accused Putrajaya of attempting to cover-up PFI's losses by the agreement with the FLC.
"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," he said.
"In reality, these ‘assets’ are merely land holdings which PFI itself does not really own but were leased from the FLC."
According to the third series of the Auditor-General's Report 2013, PFI had racked up RM27.9 billion in debts, 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," Ong said.
A report by The Edge 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.
The third series of the auditor’s report this year 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. – November 18, 2014.
