DAP MP questions Pembinaan PFI’s RM17.4 billion spending
Published: 17 March 2015 9:09 AM
DAP Serdang MP Ong Kian Ming is urging the Public Accounts Committee to question Treasury secretary-general and Pembinaan PFI director Tan Sri Dr Mohd Irwan Serigar Abdullah where RM17.4 billion of the company's spending had gone to. – The Malaysian Insider file pic, March 17, 2015.As the Public Accounts Committee (PAC) prepares to meet tomorrow over Pembinaan PFI Sdn Bhd, a government-owned firm with billions of ringgit in liabilities, a DAP MP has raised 10 questions over the little-known company's dealings.
Serdang MP Ong Kian Ming said the PAC should ask Treasury secretary-general and Pembinaan PFI director Tan Sri Dr Mohd Irwan Serigar Abdullah where the RM17.4 billion of the company's spending had gone to, as it was not recorded in the Auditor-General's (A-G) Report.
"The Auditor-General reported that at the end of 2013, RM18.6 billion from the original RM20 billion loan from EPF (Employees Provident Fund) had been spent by Pembinaan PFI.
"But the amount of actual spending on the projects listed in the A-G’s report only came up to RM1.2 billion. Where did the rest of the RM17.4 billion spending go?" he said.
Ong said Pembinaan PFI first took a RM20 billion loan from the EPF in August 2007, and it was due to be paid in full, with interest, in August 2012.
But the loan was restructured in August 2012 to payments twice a year for 15 years and the money would come from the Federal Land Commissioner (FLC) which leased federal land to Pembinaan PFI and then paid rental for this land to Pembinaan PFI as part of a lease-back agreement, he said.
"Why was such a complicated method used to pay back EPF? Why was not the RM20 billion plus interest paid back in full in August 2012?" said Ong.
He also wanted to know why the FLC, which has a 1% stake in Pembinaan PFI, was being used to repay the firm's debts, and whether it had enough revenue to fund the approximately RM2 billion of annual payments to EPF for the next 15 years.
Ong added that Pembinaan PFI had taken out another RM19.5 billion loan from EPF last year, saying this raised questions of whether it could repay the loan as it had racked up liabilities of RM27.9 billion as of 2012.
He also asked what was Putrajaya's rationale for setting up Pembinaan PFI as a channel to fund development projects, when it could just rely on the development expenditure in the government budget.
On Pembinaan PFI's apparent lack of transparency, Ong said the PAC should ask who was in the firm's management team, and why it did not have a website set up to explain its activities.
He added that Pembinaan PFI’s name seemed to indicate that the projects undertaken were being financed via Private Finance Initiatives (PFIs), with the private sector bearing some of the capital expenditure and risk of the projects.
He also noted that the last Annual Return for Pembinaan PFI was for the financial year 2012, and that the Annual Return for Pembinaan PFI for 2013 should have been completed at the end of June 2014.
Pembinaan PFI is 99.9% owned by Finance Ministry Incorporated. The Federal Land Commission (FLC) holds one share in Pembinaan PFI.
According to the Auditor-General’s report in 2013 (series 3), Pembinaan PFI had the third highest liabilities among all government-owned entities at the end of 2012.
Its total liabilities were RM27.9 billion, behind two well-known companies with huge assets, revenues and profits, namely Petronas (RM152 billion) and Khazanah Nasional (RM69 billion).
A report by The Edge revealed that Pembinaan PFI was set up to disburse RM20 billion worth of spending under the 9th Malaysian Plan (2006-2010), with a preference to be given to small-scale Bumiputera contractors for PFI contracts.
On Wednesday, Ong warned that Pembinaan PFI could "turn into another 1MDB" given its huge liabilities, in a reference to debt-laden strategic investor 1Malaysia Development Berhad (1MDB).
He said that while Pembinaan PFI recorded RM27.9 billion in debts at the end of 2012, the amount could have reached RM47.4 billion at the end of 2014. – March 17, 2015.
