During a forum on Budget 2018 earlier this week, Najib said that tolls should be abolished, adding that wherever possible he would look into unraveling the legacy problems caused by toll concession agreements.
Malaysians shouldn’t fall the empty promises of the Prime Minister whose track record has proven that he has zero commitment in abolishing these tolls.
It isn’t the first time Dato’ Seri Najib Razak promised to abolish tolls or lower toll rates. In Barisan Nasional’s manifesto for the 13th General Election, Najib promised the gradual reduction of intracity tolls within 5 years. Yet, 5 years on, not only has this promise failed to be delivered, he delivered the exact opposite.
In October 2015, 18 tolls operated by 11 concessionaires were allowed to increase their fares with some even going up RM2.30 overnight. These included toll routes such as the LDP, SMART Tunnel, MEX, AKLEH and NPE in the Klang Valley as well as the Senai-Desaru Highway in Johor and the Butterworth Outer Ring Road (BORR) in Penang.
In response to this, Najib turned around and said the the government had no choice but to allow the toll fares to increase because preventing it would require massive compensation payments. The Prime Minister went on to threaten Malaysians that taxes would have to be increased if the government were to abolish tolls.
The Prime Minister’s threats have proven true because when the government did remove certain tolls, they paid exhorbitant compensation equivalent to the amount of toll these concessionaires would have collected anyway!
When the Batu Tiga, Sg Rasau, Bukit Kayu Hitam and Eastern Dispersal Link (EDL) tolls were removed last year, the government will be paying RM2.2 billion for the first 3 tolls. For the EDL, the government will reportedly be paying a yearly compensation of RM70 million.
The above means, Najib “abolish tolls” or not, the BN government would always profit the concessionaires. Malaysians would either have to pay for the tolls directly, or pay for them via taxes paid to the Government.
Most hypocritically, the Prime Minister had only recent on 3rd December criticised Pakatan Harapan’s plan to eliminate highway tolls and reintroduce petrol subsidies will increase air pollution in the country. So did Najib temporarily change his mind to fish for votes in the impending General Election, just as he did in 2013?
Pakatan Harapan believes in the rule of law and the sanctity of the contract signed between the Government and the toll concessionaires. The provisions of the contracts allow for the Government to expropriate or buy back the concessions at cost, subject to a minimum return for the concessionaires for the past years of operations.
Barring exceptions, the agreements do not at any point in time require the Government to compensate these concessionaires for future profits. Why is the BN Government so adamant in ensuring these toll concessionaires are paid their future profits at the expense of Malaysian tax-payers?
All this is proof that Najib’s ‘promise’ to abolish tolls is just another empty promise by a Prime Minister and government desperate to hold on to power. Malaysians should not fall for these empty promises and should not forget the government’s own inability to deliver on the same pledge that it had made 5 years ago.
Showing posts with label Najib Abdul Razak. Show all posts
Showing posts with label Najib Abdul Razak. Show all posts
Saturday, February 24, 2018
Saturday, February 03, 2018
The first person who should be investigated for spreading the most outrageous ‘fake news’ in the country is none other than the Prime Minister himself, who claimed that the 1MDB’s monster RM42 billion debt is “not missing”
Earlier this week, Dato’ Seri Najib Razak announced that the government is looking into introducing laws to curb fake news which is a threat to political stability and public order. The Prime Minister said the move was necessary because the people could be instigated to hate the government or commit something like uprisings due to the influence of fake news.
However, it could not have been more ironical that the biggest purveyor of fake news today is none other than the Prime Minister himself.
Yesterday, Dato’ Seri Najib defended the 1Malaysia Development Bhd’s (1MDB) RM42 billion debt, saying the money never disappeared, unlike the RM31 billion losses incurred in Bank Negara’s (BNM) foreign exchange scandal.
However, in the BNM scandal, no one was accused of pocketing the money.
However, in the case of 1MDB, the whereabouts of the RM42 billion, or a substantial portion of it is unknown and/or unverified. In fact, if indeed Dato’ Seri Najib Razak was telling the truth, the question must be asked, why did the Cabinet classify the Auditor-General’s Report on 1MDB under the Official Secrets Act?
Or can Dato’ Seri Najib tell us where US$940 million worth of “units” is currently parked after the original custodial bank, BSI Bank was shut down?
If all monies are indeed properly accounted for in 1MDB, why is it that 1MDB has failed to produce a single audited financial statements since March 2014? In fact, it was the missing funds highlighted by none other than the United States Department of Justice (US DOJ) which led Deloitte Malaysia to withdraw their endorsement for 1MDB’s March 2013 and 2014 accounts. This means that 1MDB doesn’t have any properly audited financial statements for the past 6 years!
It could not be further ironical that Dato’ Seri Najib was lying through his teeth about 1MDB’s RM42 billion debt in front of 1,200 Muslim religious and village leaders who were about to depart for their holy pilgramage in Mecca.
Since the US DOJ exposed the money trail originating from 1MDB into the personal bank account of Dato’ Seri Najib, the Prime Minister has refused to confirm or deny the allegations. The US DOJ showed how approximately US$732 million was laundered into his account with Ambank between 2011 and 2014.
The US DOJ further showed how some of these funds have been subsequently used to acquire a US$27.3 million pink diamond pendant for his wife, Datin Seri Rosmah Mansor as well as a US$250 million luxury yacht by Jho Low.
In addition, there was also the sum of US$238 million from 1MDB which found its way to Datin Seri Rosmah’s son, Riza Aziz’s company in the United States, Red Granite Capital.
The above does not yet include billions of dollars of other assets, including private jets, luxury properties all around the world and rare expensive masterpieces, which were in the process of being seized by the United States government. These assets were deemed assets acquired via illegally laundered funds which originated from 1MDB.
Worst of all, all our questions relating to all of the above have been rejected by the Parliament Speaker so that Dato Seri Najib Razak need not be accountable to Malaysians. It cannot be more obvious that the Prime Minister has plenty to hide.
However, it could not have been more ironical that the biggest purveyor of fake news today is none other than the Prime Minister himself.
Yesterday, Dato’ Seri Najib defended the 1Malaysia Development Bhd’s (1MDB) RM42 billion debt, saying the money never disappeared, unlike the RM31 billion losses incurred in Bank Negara’s (BNM) foreign exchange scandal.
However, in the BNM scandal, no one was accused of pocketing the money.
However, in the case of 1MDB, the whereabouts of the RM42 billion, or a substantial portion of it is unknown and/or unverified. In fact, if indeed Dato’ Seri Najib Razak was telling the truth, the question must be asked, why did the Cabinet classify the Auditor-General’s Report on 1MDB under the Official Secrets Act?
Or can Dato’ Seri Najib tell us where US$940 million worth of “units” is currently parked after the original custodial bank, BSI Bank was shut down?
If all monies are indeed properly accounted for in 1MDB, why is it that 1MDB has failed to produce a single audited financial statements since March 2014? In fact, it was the missing funds highlighted by none other than the United States Department of Justice (US DOJ) which led Deloitte Malaysia to withdraw their endorsement for 1MDB’s March 2013 and 2014 accounts. This means that 1MDB doesn’t have any properly audited financial statements for the past 6 years!
It could not be further ironical that Dato’ Seri Najib was lying through his teeth about 1MDB’s RM42 billion debt in front of 1,200 Muslim religious and village leaders who were about to depart for their holy pilgramage in Mecca.
Since the US DOJ exposed the money trail originating from 1MDB into the personal bank account of Dato’ Seri Najib, the Prime Minister has refused to confirm or deny the allegations. The US DOJ showed how approximately US$732 million was laundered into his account with Ambank between 2011 and 2014.
The US DOJ further showed how some of these funds have been subsequently used to acquire a US$27.3 million pink diamond pendant for his wife, Datin Seri Rosmah Mansor as well as a US$250 million luxury yacht by Jho Low.
In addition, there was also the sum of US$238 million from 1MDB which found its way to Datin Seri Rosmah’s son, Riza Aziz’s company in the United States, Red Granite Capital.
The above does not yet include billions of dollars of other assets, including private jets, luxury properties all around the world and rare expensive masterpieces, which were in the process of being seized by the United States government. These assets were deemed assets acquired via illegally laundered funds which originated from 1MDB.
Worst of all, all our questions relating to all of the above have been rejected by the Parliament Speaker so that Dato Seri Najib Razak need not be accountable to Malaysians. It cannot be more obvious that the Prime Minister has plenty to hide.
Tuesday, January 09, 2018
Did 1MDB resort to carefully leaked fake news to The Singapore Straits Times to cover up the fact that the Ministry of Finance forked out another RM2.4 billion to foot the bill for 1MDB’s debt to IPIC?
1MDB proudly announced that they had made their final US$602.7 million or RM2.4 billion settlement payment to Abu Dhabi’s International Petroleum Company (IPIC) on 27 December, four days ahead of their deadline.
The problem is, we all know 1MDB is completely insolvent. So Malaysians are rightly concerned as to how 1MDB paid its latest instalment of their debt. All that is stated in the official 1MDB statement is that the payment is funded through its “on-going rationalisation programme”.
No one of course, has a clue as to what the “rationalisation programme” entails.
What is more interesting is the carefully planted leaks to The Singapore Straits Times (SST) to reveal that the funds to repay IPIC came from the sale of investments in financial instruments and stakes held in two 1MDB-related entities that own tracts of land in Penang and Pulau Indah, Selangor. The report merely identified the anonymous buyers as “concerns ultimately controlled by Chinese state-owned enterprises”.
This is not the first time SST had carried out a hatchet stories which helped cover up some of the 1MDB’s financial shenanigans. When the Bandar Malaysia sale to an Iskandar Waterfront-led consortium was terminated out-of-the-blue by the Ministry of Finance, it was SST which created a media maelstorm by reporting on 9 May 2017 that “Government officials and financial executives close to the situation told The Straits Times that negotiations with the Dalian Wanda Group to take a central role as master developer have reached an advanced stage…”
“Malaysian government officials noted that the new deal would be substantially higher than the previous RM12.3 billion valuation tag for the entire project. According to financial executives familiar with ongoing talks, Wanda has proposed to use half of the development for tourism and entertainment-related ventures valued at roughly US$8 billion,” the Singapore paper added.
The above proved to be a hoax of course, because when Dato’ Seri Najib Razak met Wanda a week later, he came home empty-handed – without even a face-saving “Memorandum of Understanding (MOU)” signed.
The current SST report is similarly couched in the same language. SST claimed that “Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by "concerns ultimately controlled by Chinese state-owned enterprises". The executive declined to elaborate.”
The SST report was inevitably picked up by nearly all local media outfits. This clearly served the interest of 1MDB which would want to avoid prickly questions on how they found the funds to repay IPIC.
The question really is, if 1MDB has really succeeded in disposing of its controversial properties in Pulau Indah and Penang to China-owned state enterprises, why is there absolute silence from official sources? Dato’ Seri Najib Razak and 1MDB would have been carrying out victory parades for proving their critics wrong, as they did in the past.
Surely if the companies owning these parcels of land were sold for billions of ringgit to foreign investors, from China or otherwise, official transactions would have taken place and the information would be publicly available.
More curiously, these parcels of land in Selangor and Penang were purchased by 1MDB for RM294 million and RM1.1 billion respectively. Critics were aplenty in citing that both parcels were purchased at inflated prices. However, even so, the combined purchase amounted to less than RM1.4 billion.
Hence if the SST report were to be true, then it begs the question as to which Chinese state-owned enterprises would pay an outrageous RM2.4 billion for these parcels, which in-turn allowed 1MDB to repay its second loan instalment to IPIC? Or is it more likely that it is another hoax to evade disclosing the fact that it was really the Ministry of Finance, which directly or indirectly, repaid both instalments amounting to US$1.24 billion to IPIC?
The problem is, we all know 1MDB is completely insolvent. So Malaysians are rightly concerned as to how 1MDB paid its latest instalment of their debt. All that is stated in the official 1MDB statement is that the payment is funded through its “on-going rationalisation programme”.
No one of course, has a clue as to what the “rationalisation programme” entails.
What is more interesting is the carefully planted leaks to The Singapore Straits Times (SST) to reveal that the funds to repay IPIC came from the sale of investments in financial instruments and stakes held in two 1MDB-related entities that own tracts of land in Penang and Pulau Indah, Selangor. The report merely identified the anonymous buyers as “concerns ultimately controlled by Chinese state-owned enterprises”.
This is not the first time SST had carried out a hatchet stories which helped cover up some of the 1MDB’s financial shenanigans. When the Bandar Malaysia sale to an Iskandar Waterfront-led consortium was terminated out-of-the-blue by the Ministry of Finance, it was SST which created a media maelstorm by reporting on 9 May 2017 that “Government officials and financial executives close to the situation told The Straits Times that negotiations with the Dalian Wanda Group to take a central role as master developer have reached an advanced stage…”
“Malaysian government officials noted that the new deal would be substantially higher than the previous RM12.3 billion valuation tag for the entire project. According to financial executives familiar with ongoing talks, Wanda has proposed to use half of the development for tourism and entertainment-related ventures valued at roughly US$8 billion,” the Singapore paper added.
The above proved to be a hoax of course, because when Dato’ Seri Najib Razak met Wanda a week later, he came home empty-handed – without even a face-saving “Memorandum of Understanding (MOU)” signed.
The current SST report is similarly couched in the same language. SST claimed that “Malaysian government officials declined to identify the buyers in the real estate transactions but one financial executive close to the situation said that the equity interests in the 1MDB real estate entities were acquired by "concerns ultimately controlled by Chinese state-owned enterprises". The executive declined to elaborate.”
The SST report was inevitably picked up by nearly all local media outfits. This clearly served the interest of 1MDB which would want to avoid prickly questions on how they found the funds to repay IPIC.
The question really is, if 1MDB has really succeeded in disposing of its controversial properties in Pulau Indah and Penang to China-owned state enterprises, why is there absolute silence from official sources? Dato’ Seri Najib Razak and 1MDB would have been carrying out victory parades for proving their critics wrong, as they did in the past.
Surely if the companies owning these parcels of land were sold for billions of ringgit to foreign investors, from China or otherwise, official transactions would have taken place and the information would be publicly available.
More curiously, these parcels of land in Selangor and Penang were purchased by 1MDB for RM294 million and RM1.1 billion respectively. Critics were aplenty in citing that both parcels were purchased at inflated prices. However, even so, the combined purchase amounted to less than RM1.4 billion.
Hence if the SST report were to be true, then it begs the question as to which Chinese state-owned enterprises would pay an outrageous RM2.4 billion for these parcels, which in-turn allowed 1MDB to repay its second loan instalment to IPIC? Or is it more likely that it is another hoax to evade disclosing the fact that it was really the Ministry of Finance, which directly or indirectly, repaid both instalments amounting to US$1.24 billion to IPIC?
Wednesday, December 06, 2017
Dato’ Seri Najib Razak must summon the US Ambassador and file an official protest to his golf buddy, President Donald Trump against the US Attorney-General Jeff Sessions for disparaging and destroying Malaysia’s international reputation
US Attorney-General Jeff Sessions called the Malaysian 1MDB scandal “kleptocracy at its worst” at the Global Forum on Asset Recovery hosted by the World Bank and the United Nations Office on Drugs and Crime. He informed the international audience that half of the US$3.5 billion in assets seized by the Department of Justice’s Kleptocracy Asset Recovery Initiative was related to its suits on 1MDB.
He said that allegedly corrupt officials and their associates had reportedly used the 1MDB funds for a “lavish spending spree” such as US$200 million for real estate in South California and New York, US$130 million in artwork, US$100 million in an American music label and a US$265 million yacht.
1MDB officials allegedly laundered more than US$4.5 billion in total, he said, through a complex web of opaque transactions and shell companies with bank accounts in various countries such as Switzerland, Singapore, Luxembourg and the US.
These allegations, while not new, have taken a more serious turn as the United States Attorney-General has now made these allegations at the World Bank international conference.
The question now is whether our Prime Minister Dato’ Seri Najib Razak will just let a foreign country disparage and destroy Malaysia’s international reputation and credibility? Is he not going to speak out to defend Malaysian’s honour? Does he think that the US Attorney-General’s speech will have no impact Malaysia’s attractiveness as a destination for tourism and investment?
We call upon the Prime Minister, Dato’ Seri Najib Razak to summon the United States Ambassador to express in the harshest possible terms our protest towards all the allegations made by the US Attorney-General. In fact, he should immediately file an official complaint with his golf-buddy, President Donald Trump and demand an apology from the United States government.
This week Dato’ Seri Najib is scheduled to address the UMNO General. There could not be a better opportunity for the Prime Minister to boast to his faithful that he has taken the firmest possible action against foreign powers bent on sabotaging Malaysia’s economy and progress.
Hence why is Dato’ Seri Najib Razak remaining quiet as a mouse? Is it because Jeff Sessions has merely stated what is the inconvenient truth for him and his administration?
In fact, the Government’s continued silence to the disparaging of Malaysia’s reputation and credibility by top Government leader overseas only serves to confirm that Dato’ Seri Najib Razak and his Government is guilty as charged – billions of dollars have been laundered by “corrupt officials and their associates”.
In that case, Dato’ Seri Najib Razak must answer to every Malaysian as to why not a single person relating to the 1MDB scandal has been investigated and charged for these heinous crimes in Malaysia.
He said that allegedly corrupt officials and their associates had reportedly used the 1MDB funds for a “lavish spending spree” such as US$200 million for real estate in South California and New York, US$130 million in artwork, US$100 million in an American music label and a US$265 million yacht.
1MDB officials allegedly laundered more than US$4.5 billion in total, he said, through a complex web of opaque transactions and shell companies with bank accounts in various countries such as Switzerland, Singapore, Luxembourg and the US.
These allegations, while not new, have taken a more serious turn as the United States Attorney-General has now made these allegations at the World Bank international conference.
The question now is whether our Prime Minister Dato’ Seri Najib Razak will just let a foreign country disparage and destroy Malaysia’s international reputation and credibility? Is he not going to speak out to defend Malaysian’s honour? Does he think that the US Attorney-General’s speech will have no impact Malaysia’s attractiveness as a destination for tourism and investment?
We call upon the Prime Minister, Dato’ Seri Najib Razak to summon the United States Ambassador to express in the harshest possible terms our protest towards all the allegations made by the US Attorney-General. In fact, he should immediately file an official complaint with his golf-buddy, President Donald Trump and demand an apology from the United States government.
This week Dato’ Seri Najib is scheduled to address the UMNO General. There could not be a better opportunity for the Prime Minister to boast to his faithful that he has taken the firmest possible action against foreign powers bent on sabotaging Malaysia’s economy and progress.
Hence why is Dato’ Seri Najib Razak remaining quiet as a mouse? Is it because Jeff Sessions has merely stated what is the inconvenient truth for him and his administration?
In fact, the Government’s continued silence to the disparaging of Malaysia’s reputation and credibility by top Government leader overseas only serves to confirm that Dato’ Seri Najib Razak and his Government is guilty as charged – billions of dollars have been laundered by “corrupt officials and their associates”.
In that case, Dato’ Seri Najib Razak must answer to every Malaysian as to why not a single person relating to the 1MDB scandal has been investigated and charged for these heinous crimes in Malaysia.
Tuesday, November 21, 2017
The Minister of Finance should stop telling lies and giving excuses, and admit that Malaysians will never get to see any more audited financial statements for 1MDB and SRC International
Former Deputy Prime Minister, Tan Sri Muhyiddin Yassin had asked the Minister of Finance for the status of the much delayed financial statements for 1MDB.
In a parliamentary reply dated 16 November, the Minister of Finance responded that “on July 8, 2015, the police seized various original documents from 1MDB’s office. 1MDB’s management has contacted the police regarding the return of the company’s documents, but till today, the original documents haven’t been returned to the company”.
Therefore, since the last financial statement prepared by Deloitte Malaysia for the period ending March 2014, there has been no official audits conducted for the scandal-ridden company. Worse, last year, Deloitte Malaysia has withdrawn its endorsement for the March 2013 and March 2014 financial statements.
This means that 1MDB has since March 2012, or more than 5 years ago, 1MDB has not filed any financial statements which have been endorsed by an external auditor.
This unprecedented delay was despite repeated deadline extensions granted to 1MDB by the Companies Commission of Malaysian (SSM) to file its annual reports. And now the Minister of Finance tells us that it has completely given up and said that it cannot even provide a deadline.
If the Minister of Finance is indeed serious about 1MDB completing its audit process, why hasn’t he, who is also the Prime Minister ‘discuss’ this matter with the Royal Malaysian Police to work out an arrangement for the audit to be carried out?
Surely it cannot be too hard for investigators to allow the auditors to, at the very least, sight the documents needed? Moreover, the police have said that their investigation in 1MDB is now concluded and that they have returned their investigation papers to the Attorney-General’s Chambers. So why exactly are investigators still holding to these documents if it is necessary for the proper auditing of the company?
We are not asking for the Police to return, relinquish or destroy possible evidence in its hands. We are merely asking for the Police to allow the statutory audit of 1MDB to be carried out. The audit is of great urgency and importance as it will confirm if the allegations of billions of ringgit being misappropriated to fictitious investment accounts in various overseas institutions from Singapore to the British Virgin Islands and a little-known island-state of Curacao in South America.
It should be noted that even when the Auditor-General and the Public Accounts Committee was investigating 1MDB prior to 2016, 1MDB refused to even supply its management accounts, despite being requested to do so.
The Finance Minister’s complete lackadaisical attitude towards the audit of a state-owned company with nearly RM40 billion in debts shows that it is a cover up to prevent the truth from being discovered.
The fact that 1MDB cannot produce any audited financial statements since March 2012 further rubbishes Dato’ Seri Najib Razak’s pre-budget defence and praise of 1MDB, and the audacious claim that 1MDB will soon “return to profitability”. It can’t even produce its accounts, what profit is the Prime Minister talking about?
In a parliamentary reply dated 16 November, the Minister of Finance responded that “on July 8, 2015, the police seized various original documents from 1MDB’s office. 1MDB’s management has contacted the police regarding the return of the company’s documents, but till today, the original documents haven’t been returned to the company”.
Therefore, since the last financial statement prepared by Deloitte Malaysia for the period ending March 2014, there has been no official audits conducted for the scandal-ridden company. Worse, last year, Deloitte Malaysia has withdrawn its endorsement for the March 2013 and March 2014 financial statements.
This means that 1MDB has since March 2012, or more than 5 years ago, 1MDB has not filed any financial statements which have been endorsed by an external auditor.
This unprecedented delay was despite repeated deadline extensions granted to 1MDB by the Companies Commission of Malaysian (SSM) to file its annual reports. And now the Minister of Finance tells us that it has completely given up and said that it cannot even provide a deadline.
If the Minister of Finance is indeed serious about 1MDB completing its audit process, why hasn’t he, who is also the Prime Minister ‘discuss’ this matter with the Royal Malaysian Police to work out an arrangement for the audit to be carried out?
Surely it cannot be too hard for investigators to allow the auditors to, at the very least, sight the documents needed? Moreover, the police have said that their investigation in 1MDB is now concluded and that they have returned their investigation papers to the Attorney-General’s Chambers. So why exactly are investigators still holding to these documents if it is necessary for the proper auditing of the company?
We are not asking for the Police to return, relinquish or destroy possible evidence in its hands. We are merely asking for the Police to allow the statutory audit of 1MDB to be carried out. The audit is of great urgency and importance as it will confirm if the allegations of billions of ringgit being misappropriated to fictitious investment accounts in various overseas institutions from Singapore to the British Virgin Islands and a little-known island-state of Curacao in South America.
It should be noted that even when the Auditor-General and the Public Accounts Committee was investigating 1MDB prior to 2016, 1MDB refused to even supply its management accounts, despite being requested to do so.
The Finance Minister’s complete lackadaisical attitude towards the audit of a state-owned company with nearly RM40 billion in debts shows that it is a cover up to prevent the truth from being discovered.
The fact that 1MDB cannot produce any audited financial statements since March 2012 further rubbishes Dato’ Seri Najib Razak’s pre-budget defence and praise of 1MDB, and the audacious claim that 1MDB will soon “return to profitability”. It can’t even produce its accounts, what profit is the Prime Minister talking about?
Sunday, November 19, 2017
Dato’ Seri Najib Razak should explain why he insists on changing MRT3 project delivery model despite singing praises of the purported MRT1 “success story”
In his speech at the 2017 SME Annual Conference last week, Najib said that the MRT costs were kept “below budget” because of the “high quality of local companies” that were chosen through its “rigid and transparent tender exercise”.
If that’s the case, then why are we seeing a tender exercise for MRT3 with questionable transparency, thin on project specifications and with financing requirements that would disqualify all of the “high quality local companies” that Najib has praised?
MRT Corp announced last week that the MRT3 project would be awarded as a turnkey contract rather than the project delivery partner (PDP) model used for MRT1 and 2. This means that the tender process for MRT3 consists of a single tender estimated to be worth between RM40 - 50 billion.
By comparison, the tender process for MRT1 and 2 was made up of multiple tenders for different parts of the project led by a “Project Delivery Partner”. For MRT3, these smaller packages will all be subcontracted by the main turnkey developer.
In addition, the MRT3 tender requires any tenderer to provide financing for the project of no less than 90% with a repayment period of no less than 30 years on top of an 8 year moratorium. If the project costs RM50 billion, that means the tendering company or consortiums would need to provide at least RM45 billion in financing.
Dato’ Seri Najib Razak have argued that MRT3 may save on financing cost. However, what is the point of lower financing cost, if the actual cost of the project becomes substantially higher resulting in much higher cost of project despite the lower financing cost?
There is no question there are no companies in Malaysia who are able to provide that scale of financing despite having all the necessary qualities and technical skill-sets to complete the project. Financing for MRT1 and 2 was undertaken by MRT Corp through DanaInfra, which freed bidding companies from having to provide their own financing options.
Worse, the tender period itself is a ridiculously short 45 days for a massive RM50 billion project. In fact, even the MRT alignment of the line has yet to be announced by MRT Corp.
This raises a further question – is the entire MRT3 tender exercise skewed in favour of particular parties? Why is Dato’ Seri Najib Razak going out of his way to contradict himself?
As I’ve stated previously, all the above questions only go to prove that there’s more than it meets the eye with the latest ‘mysterious’ decision to switch the project model from the much ‘praised’ PDP to the turnkey cum financing model.
If that’s the case, then why are we seeing a tender exercise for MRT3 with questionable transparency, thin on project specifications and with financing requirements that would disqualify all of the “high quality local companies” that Najib has praised?
MRT Corp announced last week that the MRT3 project would be awarded as a turnkey contract rather than the project delivery partner (PDP) model used for MRT1 and 2. This means that the tender process for MRT3 consists of a single tender estimated to be worth between RM40 - 50 billion.
By comparison, the tender process for MRT1 and 2 was made up of multiple tenders for different parts of the project led by a “Project Delivery Partner”. For MRT3, these smaller packages will all be subcontracted by the main turnkey developer.
In addition, the MRT3 tender requires any tenderer to provide financing for the project of no less than 90% with a repayment period of no less than 30 years on top of an 8 year moratorium. If the project costs RM50 billion, that means the tendering company or consortiums would need to provide at least RM45 billion in financing.
Dato’ Seri Najib Razak have argued that MRT3 may save on financing cost. However, what is the point of lower financing cost, if the actual cost of the project becomes substantially higher resulting in much higher cost of project despite the lower financing cost?
There is no question there are no companies in Malaysia who are able to provide that scale of financing despite having all the necessary qualities and technical skill-sets to complete the project. Financing for MRT1 and 2 was undertaken by MRT Corp through DanaInfra, which freed bidding companies from having to provide their own financing options.
Worse, the tender period itself is a ridiculously short 45 days for a massive RM50 billion project. In fact, even the MRT alignment of the line has yet to be announced by MRT Corp.
This raises a further question – is the entire MRT3 tender exercise skewed in favour of particular parties? Why is Dato’ Seri Najib Razak going out of his way to contradict himself?
As I’ve stated previously, all the above questions only go to prove that there’s more than it meets the eye with the latest ‘mysterious’ decision to switch the project model from the much ‘praised’ PDP to the turnkey cum financing model.
Friday, November 17, 2017
The Government should call ERL’s bluff and allow ticket prices to hike instead of bailing out the company with a 30-year extension
The Deputy Minister of Transport, Aziz Kaprawi, told Parliament this week that the Government was extending the concession period for the ERL service by 30 years. This will double the concession period for the ERL, which was meant to expire in 2029. The concession for the ERL is held by Expressrail Link Sdn. Bhd (ERL) and was signed in 1997.
The Deputy Minister has stated that concession extension is the Government’s compensation to ERL for rejecting its last three scheduled fare hikes. The ERL Express service is currently priced at RM55 but should be priced at RM74 according to its initial concession agreement. It is meant to increase again in 2019 to RM97 and another increase was due in 2024 bringing the fare up to an astonishing RM126.
ERL had previously demanded RM2.9 billion in compensation from the government due to its inability to raise fares based on its initial schedule. However, the Auditor-General’s report found that ERL’s revenue was between 11.5% and 13.7% of its projected revenues. Hence why should tax-payers compensate ERL for revenues which were outrageously inflated anyway?
On the contrary, instead of trying to stop the fare hikes, we call upon the Government should “approve” the fare hike per the concession agreement, should ERL chooses to implement them.
This is because should ERL chooses to hike the fares further, their ridership will fall even further than its already low levels today. The Deputy Transport Minister in his parliamentary reply on 15 November confirmed that when the ERL increased its fares from RM35 to the current RM55 fare on 1 January 2016, the number of passengers dropped by 19% to 8.9 million.
Any ordinary person with a sound mind would be able to tell you that should ERL choose to increase its fares further per the above schedule, the number of riders will drop even more drastically. And by Datuk Aziz Kaprawi’s own admission, ERL had suffered 6 continuous years of post-tax losses from 2009 to 2014.
The reason is simple, there’s now ample competition in transport service availability to both KLIA and KLIA2. The same journey using GrabCar or Uber ride service will cost RM65 and approximately RM75 respectively. If the rides are shared, then the fares are significantly cheaper than ERL.
Hence the Government should call ERL’s bluff and allow them to proceed to raise its fares. If ERL does so, and collapse financially due to the lack of passengers, the Government has the right under the concession agreement to take back its service.
However, if ERL chooses not to hike its fares despite being allowed to do so by the Government, then the tax-payers will be absolved of any obligations to compensate ERL!
The question hence for the Government is, is its rejection of fare hikes an honest attempt to protect the rakyat, or its really a masked attempt to bail out ERL and save a crony-linked company?
The ERL concession was awarded in 1999 through a direct negotiation with the ERLSB, whose largest shareholder is the YTL Group. By choosing to extend ERLSB’s concession, the Government is helping ensure that those lopsided terms continue.
The ERL has taken a business risk with seemingly lucrative terms – including a fee of RM5 and RM1 to be paid for every international and domestic traveller respectively using KLIA or KLIA2, regardless of whether they use the ERL. Since 2002, this has amounted to RM741 million.
However, now that business apparently isn’t so good, why should tax-payers step in now to bail out the company shareholders?
The Deputy Minister has stated that concession extension is the Government’s compensation to ERL for rejecting its last three scheduled fare hikes. The ERL Express service is currently priced at RM55 but should be priced at RM74 according to its initial concession agreement. It is meant to increase again in 2019 to RM97 and another increase was due in 2024 bringing the fare up to an astonishing RM126.
ERL had previously demanded RM2.9 billion in compensation from the government due to its inability to raise fares based on its initial schedule. However, the Auditor-General’s report found that ERL’s revenue was between 11.5% and 13.7% of its projected revenues. Hence why should tax-payers compensate ERL for revenues which were outrageously inflated anyway?
On the contrary, instead of trying to stop the fare hikes, we call upon the Government should “approve” the fare hike per the concession agreement, should ERL chooses to implement them.
This is because should ERL chooses to hike the fares further, their ridership will fall even further than its already low levels today. The Deputy Transport Minister in his parliamentary reply on 15 November confirmed that when the ERL increased its fares from RM35 to the current RM55 fare on 1 January 2016, the number of passengers dropped by 19% to 8.9 million.
Any ordinary person with a sound mind would be able to tell you that should ERL choose to increase its fares further per the above schedule, the number of riders will drop even more drastically. And by Datuk Aziz Kaprawi’s own admission, ERL had suffered 6 continuous years of post-tax losses from 2009 to 2014.
The reason is simple, there’s now ample competition in transport service availability to both KLIA and KLIA2. The same journey using GrabCar or Uber ride service will cost RM65 and approximately RM75 respectively. If the rides are shared, then the fares are significantly cheaper than ERL.
Hence the Government should call ERL’s bluff and allow them to proceed to raise its fares. If ERL does so, and collapse financially due to the lack of passengers, the Government has the right under the concession agreement to take back its service.
However, if ERL chooses not to hike its fares despite being allowed to do so by the Government, then the tax-payers will be absolved of any obligations to compensate ERL!
The question hence for the Government is, is its rejection of fare hikes an honest attempt to protect the rakyat, or its really a masked attempt to bail out ERL and save a crony-linked company?
The ERL concession was awarded in 1999 through a direct negotiation with the ERLSB, whose largest shareholder is the YTL Group. By choosing to extend ERLSB’s concession, the Government is helping ensure that those lopsided terms continue.
The ERL has taken a business risk with seemingly lucrative terms – including a fee of RM5 and RM1 to be paid for every international and domestic traveller respectively using KLIA or KLIA2, regardless of whether they use the ERL. Since 2002, this has amounted to RM741 million.
However, now that business apparently isn’t so good, why should tax-payers step in now to bail out the company shareholders?
Thursday, November 16, 2017
Why is Malaysia the most “man man” (slowly, slowly) in the world when the rest of the world have been very “kuai kuai” (quickly, quickly) in persecuting those who have been complicit in stealing billions of dollars from Malaysian tax-payers?
Deputy Minister in the Prime Minister's Department Razali Ibrahim urged patience with regard to the ongoing investigation into 1MDB, even using words in Chinese to stress his point.
"In Chinese, we say man man lah, man man (slowly lah, slowly). We will wait for the (outcome of the) matter, which is under investigation by the relevant authorities. God willing, the truth will be revealed," Razali told the Dewan Rakyat on Tuesday, 14 November.
The government treating 1MDB as a joke just shows how ridiculously selective investigations in Malaysia are. It is obnoxious to expect Malaysians to wait even longer for a decision on a case involving multi-billion dollars that’s already been ongoing for years.
Worse, other countries have already investigated, charged and even jailed perpetrators involved in the 1MDB, while Malaysian authorities continue to drag their feet on the matter.
How much slower does the Deputy Minister expect investigations to slow down to?
His statement lays bare the sheer double standards of the government and authorities when it comes to investigating politically-linked scandals. If it’s an Opposition or parties critical of the Government, the authorities act with lightning speed. However, when the tables are turned, authorities are suddenly asked to go through things slowly.
The first police reports filed against 1MDB were done in 2014. In June 2015, the Home Minister said in Parliament that investigation papers had been referred to the Attorney- General in March. That was over two years ago, and the Attorney-General and the police are still passing the investigation papers between each other.
By comparison, the investigation into Penang Chief Minister Lim Guan Eng, started with a report to MACC on March 18 2016. Investigation papers were submitted to the AG in May and an arrest by MACC was made in June. It took MACC just two months to investigate and the AG just one month to decide on prosecution despite Lim Guan Eng having presented evidence to the contrary of the charges.
Why don’t we see this level of efficiency when it comes to scandals involving tens of billions of ringgit which implicated even the Prime Minister and his family?
Dismissive comments such as in the Deputy Minister’s speech prove just how little the government cares about upholding justice and protecting the interest of ordinary Malaysians. With billions of Malaysian public funds gone and allegedly funding the lavish lifestyles of others, we need to ask who the government are really defending – the people or crooks who are in power?
"In Chinese, we say man man lah, man man (slowly lah, slowly). We will wait for the (outcome of the) matter, which is under investigation by the relevant authorities. God willing, the truth will be revealed," Razali told the Dewan Rakyat on Tuesday, 14 November.
The government treating 1MDB as a joke just shows how ridiculously selective investigations in Malaysia are. It is obnoxious to expect Malaysians to wait even longer for a decision on a case involving multi-billion dollars that’s already been ongoing for years.
Worse, other countries have already investigated, charged and even jailed perpetrators involved in the 1MDB, while Malaysian authorities continue to drag their feet on the matter.
How much slower does the Deputy Minister expect investigations to slow down to?
His statement lays bare the sheer double standards of the government and authorities when it comes to investigating politically-linked scandals. If it’s an Opposition or parties critical of the Government, the authorities act with lightning speed. However, when the tables are turned, authorities are suddenly asked to go through things slowly.
The first police reports filed against 1MDB were done in 2014. In June 2015, the Home Minister said in Parliament that investigation papers had been referred to the Attorney- General in March. That was over two years ago, and the Attorney-General and the police are still passing the investigation papers between each other.
By comparison, the investigation into Penang Chief Minister Lim Guan Eng, started with a report to MACC on March 18 2016. Investigation papers were submitted to the AG in May and an arrest by MACC was made in June. It took MACC just two months to investigate and the AG just one month to decide on prosecution despite Lim Guan Eng having presented evidence to the contrary of the charges.
Why don’t we see this level of efficiency when it comes to scandals involving tens of billions of ringgit which implicated even the Prime Minister and his family?
Dismissive comments such as in the Deputy Minister’s speech prove just how little the government cares about upholding justice and protecting the interest of ordinary Malaysians. With billions of Malaysian public funds gone and allegedly funding the lavish lifestyles of others, we need to ask who the government are really defending – the people or crooks who are in power?
Tuesday, November 14, 2017
Current Bandar Malaysia RFP likely to suffer same fate as its failed sale to Iskandar Waterfront Holdings and subsequent imaginary sale to Dalian Wanda Group
In my parliamentary question on 8 November I had asked the Ministry of Finance (MoF) for a simple update on the progress of Bandar Malaysia’s search for a new master developer.
The new tender process for Bandar Malaysia’s developer comes following the spectacular collapse of the RM7.41 billion deal with the Iskandar Waterfront Holdings (IWH)-led consortium to acquire a 60% stake in Bandar Malaysia in May 2017.
Following that was another dramatic public relations disaster when the Prime Minister, Dato’ Seri Najib Razak failed to seal an improved multi-billion dollar Bandar Malaysia deal with China’s Dalian Wanda Group.
In attempt to save face and salvage the project, Bandar Malaysia’s owner, the MoF, launched a new request for proposals (RFP) to collect bids for a new master developer for the project.
The new RFP also included more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and must have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.
In the Finance Minister’s answer to my question, he only restated information which were already made known to the press for months. He said that the RFP process had been completed and listed out the same criteria that had been said before. He added that 8 companies had met these criteria and that a final decision will be announced soon.
The reply shows that all is clearly not going to plans with the re-bidding process of Bandar Malaysia.
When the RFP was first announced in May, the new Bandar Malaysia chairman and MoF Secretary-General Irwan Serigar Abdullah said that the RFP deadline would close on June 30 and the final decision would be made by July 14.
The RFP was finally launched on July 5, with a deadline on July 20. The Singapore Straits Times had reported on July 25 that 7 Chinese state-controlled entities and two Japanese firms were in competition for the project. They included China State Construction Engineering Co Ltd, China Communications Construction Company (CCCC) from China and Daiwa House Industry Group and Mitsui Fudosan Co Ltd from Japan.
Then on August 23, Tan Sri Irwan Serigar updated Malaysians with his announcement that “6 companies have shown interest and visited the Bandar Malaysia project site”.
“We took them for a site visit and they need to submit their proposal by the end of this month,” he said. However, Irwan said the government does not know how many companies, out of the six, will actually submit their proposals based on the RFP for the project.
Now, it is now 4 months after the RFP was announced and we have had no further updates as to who might become the master developer for the Bandar Malaysia. All we have from the media and parliamentary responses is there are 6 to 8 companies who were perhaps interested in the project.
The delay and inconsistent announcements made however, points to a simple conclusion. The Bandar Malaysia is no nearer to finding a new suitor than it did when it terminated the failed agreement with the IWH-led consortium. The so-called interested parties were either not that interested, or were not willing to offer anything close to MoF’s over-priced valuation of Bandar Malaysia.
The MoF should stop daydreaming and start getting real. The previous Bandar Malaysia “open tender” resulted only with the IWH-consortium winning the bid but failing to secure the necessary financing for the valuation to complete the transaction. It follows to ask why would any global company in the right mind, offer anything more for Bandar Malaysia especially when they also know that MoF is rather desperate to make the sale?
Tony Pua minta Menteri Kewangan menyatakan berapa syarikat telah menyerahkan cadangan muktamad dalam tender semula projek Bandar Malaysia. Berapa antaranya adalah syarikat Fortune 500 dan bilakah keputusan tender tersebut akan diumumkan?
The new tender process for Bandar Malaysia’s developer comes following the spectacular collapse of the RM7.41 billion deal with the Iskandar Waterfront Holdings (IWH)-led consortium to acquire a 60% stake in Bandar Malaysia in May 2017.
Following that was another dramatic public relations disaster when the Prime Minister, Dato’ Seri Najib Razak failed to seal an improved multi-billion dollar Bandar Malaysia deal with China’s Dalian Wanda Group.
In attempt to save face and salvage the project, Bandar Malaysia’s owner, the MoF, launched a new request for proposals (RFP) to collect bids for a new master developer for the project.
The new RFP also included more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and must have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.
In the Finance Minister’s answer to my question, he only restated information which were already made known to the press for months. He said that the RFP process had been completed and listed out the same criteria that had been said before. He added that 8 companies had met these criteria and that a final decision will be announced soon.
The reply shows that all is clearly not going to plans with the re-bidding process of Bandar Malaysia.
When the RFP was first announced in May, the new Bandar Malaysia chairman and MoF Secretary-General Irwan Serigar Abdullah said that the RFP deadline would close on June 30 and the final decision would be made by July 14.
The RFP was finally launched on July 5, with a deadline on July 20. The Singapore Straits Times had reported on July 25 that 7 Chinese state-controlled entities and two Japanese firms were in competition for the project. They included China State Construction Engineering Co Ltd, China Communications Construction Company (CCCC) from China and Daiwa House Industry Group and Mitsui Fudosan Co Ltd from Japan.
Then on August 23, Tan Sri Irwan Serigar updated Malaysians with his announcement that “6 companies have shown interest and visited the Bandar Malaysia project site”.
“We took them for a site visit and they need to submit their proposal by the end of this month,” he said. However, Irwan said the government does not know how many companies, out of the six, will actually submit their proposals based on the RFP for the project.
Now, it is now 4 months after the RFP was announced and we have had no further updates as to who might become the master developer for the Bandar Malaysia. All we have from the media and parliamentary responses is there are 6 to 8 companies who were perhaps interested in the project.
The delay and inconsistent announcements made however, points to a simple conclusion. The Bandar Malaysia is no nearer to finding a new suitor than it did when it terminated the failed agreement with the IWH-led consortium. The so-called interested parties were either not that interested, or were not willing to offer anything close to MoF’s over-priced valuation of Bandar Malaysia.
The MoF should stop daydreaming and start getting real. The previous Bandar Malaysia “open tender” resulted only with the IWH-consortium winning the bid but failing to secure the necessary financing for the valuation to complete the transaction. It follows to ask why would any global company in the right mind, offer anything more for Bandar Malaysia especially when they also know that MoF is rather desperate to make the sale?
Minister of Energy, Green Technology and Water confirms that 1MDB had no role in reducing electricity tariffs or costs, proving PM’s claim of massive savings completely baseless.
In his blog post prior to the Budget 2018 announcement, the Prime Minister Dato’ Seri Najib Razak had made the claim that 1MDB’s involvement in the renegotiation of lopsided Power Purchase Agreements (PPAs) had resulted in massive savings for Malaysians. He said that 1MDB’s participation in the energy industry had saved the country RM200 billion over the next 20 years.
However, the Minister of Energy, Green Technology and Water in his winding-up speech in Parliament on 9 November, said that 1MDB’s ownership of Tanjong Energy, Genting Sanyen and Jimah had nothing to do with the increase or decrease of electricity tariff rates or costs because 1MDB maintained the rates as stipulated by the final sales and purchase agreements.
Dato’ Seri Maximus Ongkili has now effectively clarified in Parliament that Najib’s claims are completely ridiculous.
Not only has the Minister stated without doubt that 1MDB’s participation has had no effect on the tariff rates or energy costs, he added that the cost savings that Najib has accredited to 1MDB have nothing to do with them either.
Ongkili said in his speech that the lower capacity rate financial (CRF) of RM6kw per month for 48 months, which resulted in RM1.6 billion in savings was a condition in the tender set by the Energy Commission. It was certainly not because of 1MDB’s noble generosity.
We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before. However, we can now also confirm that 1MDB has played no role to atone for the the above injustice.
Malaysians haven’t enjoyed a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs. Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.83 billion.
It is time for Dato' Seri Najib Razak to face the facts and deal with the billions of ringgit of losses and damage that 1MDB has caused to the tax-payers in our power sector, amongst other billions of ringgit of losses.
However, the Minister of Energy, Green Technology and Water in his winding-up speech in Parliament on 9 November, said that 1MDB’s ownership of Tanjong Energy, Genting Sanyen and Jimah had nothing to do with the increase or decrease of electricity tariff rates or costs because 1MDB maintained the rates as stipulated by the final sales and purchase agreements.
Dato’ Seri Maximus Ongkili has now effectively clarified in Parliament that Najib’s claims are completely ridiculous.
Not only has the Minister stated without doubt that 1MDB’s participation has had no effect on the tariff rates or energy costs, he added that the cost savings that Najib has accredited to 1MDB have nothing to do with them either.
Ongkili said in his speech that the lower capacity rate financial (CRF) of RM6kw per month for 48 months, which resulted in RM1.6 billion in savings was a condition in the tender set by the Energy Commission. It was certainly not because of 1MDB’s noble generosity.
We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before. However, we can now also confirm that 1MDB has played no role to atone for the the above injustice.
Malaysians haven’t enjoyed a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs. Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.83 billion.
It is time for Dato' Seri Najib Razak to face the facts and deal with the billions of ringgit of losses and damage that 1MDB has caused to the tax-payers in our power sector, amongst other billions of ringgit of losses.
Wednesday, November 08, 2017
Another ‘top secret’ 1MDB bailout by 1MDB via TRX land buyback by the Ministry of Finance
During the last parliamentary session, I had asked the Minister of Finance what is the cost and size of the land in Tun Razak Exchange (TRX) which its wholly-owned subsidiary, Aroma Teraju Sdn Bhd acquired from 1MDB in 2015.
The reply which I had received from the Dato’ Seri Najib Razak on 31 July, was that the information was protected by a confidentiality clause between the buyer and the seller.
The answer is ridiculous because both entities are wholly-owned by the Ministry of Finance, which in turn is accountable to both the Parliament and the public at large, and hence such information should never be a secret. This is especially since the price of a piece of land is in no way a threat to national security, and the information is certainly not protected by the Official Secrets Act.
Therefore, for the current sitting, I had asked why the land size and price for the purchase of Tun Razak Exchange (TRX) land by MOF-owned Aroma Teraju from 1MDB cannot be disclosed even though both companies were wholly-owned subsidiaries of MOF.
Dato’ Seri Najib Razak responded by saying this was because of the agreement’s confidentiality clause to protect the commercial considerations of both parties. He goes on to say that these terms are consistent with the key terms used in the market among other similar transactions.
The Minister chose to ignore is that both Aroma Teraju and 1MDB are wholly-owned by MOF. What is the purpose of this secrecy when both parties in the agreement are owned by the Government?
There is only one reason for invoking this confidentiality clause, and it has nothing to with the purported “commercial considerations”. It is to cover up the fact that MoF paid over-the-top to buy back a fraction of the prime land it had sold at bargain basement prices to 1MDB in 2010.
Based on the 2011 1MDB Financial Statements, the 70 acre TRX land was acquired from the Government at the value RM194 million, or approximately RM64 per square feet in 2010.
However, in the same year that Aroma Teraju acquired the above-mentioned piece of land from 1MDB, the latter also sold other parcels of TRX land to other government related institutions. Lembaga Tabung Haji acquired 1.6 acres for RM188.5 million or more than RM2,800psf. Affin Bank, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), acquired 1.25 acres for RM255 million or nearly an eye-popping RM4,700psf.
If Aroma Teraju paid any where near the prices paid by Tabung Haji or Affin Bank, it would mean that Malaysian tax-payers would be been ripped off beyond their wildest imagination. Very simply, 1MDB purchased land from the Government at RM64psf and sold a fraction of the piece of undeveloped land back to the Government five years later at an exhorbitant thousands of ringgit per square feet.
I challenge the 1MDB, Arul Kanda or the Finance Minister to deny my allegations with facts and figures. Otherwise, it would merely confirm that the secrecy over a simple sales and purchase agreement between two government entities is really to cover up another one of the daylight robberies against the Malaysian tax-payers to bail out the debt-stricken 1MDB.
The reply which I had received from the Dato’ Seri Najib Razak on 31 July, was that the information was protected by a confidentiality clause between the buyer and the seller.
The answer is ridiculous because both entities are wholly-owned by the Ministry of Finance, which in turn is accountable to both the Parliament and the public at large, and hence such information should never be a secret. This is especially since the price of a piece of land is in no way a threat to national security, and the information is certainly not protected by the Official Secrets Act.
Therefore, for the current sitting, I had asked why the land size and price for the purchase of Tun Razak Exchange (TRX) land by MOF-owned Aroma Teraju from 1MDB cannot be disclosed even though both companies were wholly-owned subsidiaries of MOF.
Tony Pua minta Menteri Kewangan menyatakan apa sebabnya keluasan dan harga pembelian tanah Tun Razak Exchange (TRX) oleh syarikat Aroma Teraju daripada 1MDB tidak boleh diumumkan walaupun kedua-dua syarikat tersebut merupakan anak syarikat milik penuh Kementerian KewanganOnce again, in the reply dated 6 November 2017, I received utter nonsense from the Finance Minister which justified his being awarded “Asia’s Worst Finance Minister 2016” by FinanceAsia.
Dato’ Seri Najib Razak responded by saying this was because of the agreement’s confidentiality clause to protect the commercial considerations of both parties. He goes on to say that these terms are consistent with the key terms used in the market among other similar transactions.
The Minister chose to ignore is that both Aroma Teraju and 1MDB are wholly-owned by MOF. What is the purpose of this secrecy when both parties in the agreement are owned by the Government?
There is only one reason for invoking this confidentiality clause, and it has nothing to with the purported “commercial considerations”. It is to cover up the fact that MoF paid over-the-top to buy back a fraction of the prime land it had sold at bargain basement prices to 1MDB in 2010.
Based on the 2011 1MDB Financial Statements, the 70 acre TRX land was acquired from the Government at the value RM194 million, or approximately RM64 per square feet in 2010.
However, in the same year that Aroma Teraju acquired the above-mentioned piece of land from 1MDB, the latter also sold other parcels of TRX land to other government related institutions. Lembaga Tabung Haji acquired 1.6 acres for RM188.5 million or more than RM2,800psf. Affin Bank, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), acquired 1.25 acres for RM255 million or nearly an eye-popping RM4,700psf.
If Aroma Teraju paid any where near the prices paid by Tabung Haji or Affin Bank, it would mean that Malaysian tax-payers would be been ripped off beyond their wildest imagination. Very simply, 1MDB purchased land from the Government at RM64psf and sold a fraction of the piece of undeveloped land back to the Government five years later at an exhorbitant thousands of ringgit per square feet.
I challenge the 1MDB, Arul Kanda or the Finance Minister to deny my allegations with facts and figures. Otherwise, it would merely confirm that the secrecy over a simple sales and purchase agreement between two government entities is really to cover up another one of the daylight robberies against the Malaysian tax-payers to bail out the debt-stricken 1MDB.
Friday, November 03, 2017
Najib’s toll ‘freebie’ election goodie to cost Malaysians billions of ringgit
In an interview with TV3 Nightline, Second Finance Minister Datuk Johari Abdul Ghani said that PLUS would have to be compensated to the tune of RM102 million per year for abolishing the Batu Tiga and Sungai Rasau tolls and RM8 million for the Bukit Kayu Hitam toll. That’s a total of RM110 million per year just to PLUS. The compensation for the Eastern Dispersal Link (EDL) was said to be RM8 million, going to current concessionaire MRCB.
The above will cost the government RM118 million per year just to abolish these four tolls.
The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion. However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.
Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.
Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.
If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.
Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas. And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.
For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion. And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.
We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.
The above will cost the government RM118 million per year just to abolish these four tolls.
The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion. However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.
Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.
Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.
If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.
Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas. And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.
For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion. And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.
We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.
Wednesday, November 01, 2017
We either have the stupidest Finance Minister in the world or one who is trying his very best to pretend to be the stupidest
I have asked the Minister of Finance to state the current value of remaining investment ‘units’ owned by 1MDB subsidiary Brazen Sky Limited and to name the bank or financial institution that was the ‘custodian’ of those investment ‘units’.
Tony Pua meminta Menteri Kewangan menyatakan baki nilai terkini pelaburan ‘unit’ yang dimiliki oleh anak syarikat 1MDB, Brazen Sky Limited dan nama institusi bank atau kewangan yang kini menjadi ‘custodian’ kepada pelaburan tersebut.
This question was rejected by the Speaker during the last sitting in July with the utterly ridiculous excuse that it was “buah fikiran” or basically a figment of my imagination. I’m grateful that the second attempt at posing this question to the Finance Minister has been accepted.
However, my joy was shortlived. I’ve received the reply dated 30 October 2017 from the Minister of Finance yesterday (attached). It was the stupidest “pretend to be stupid” reply I have ever received from any Minister in my 9 and the half years in Parliament.
My question asked what is the current value of “units” and who is the custodian bank. The reply start with “rancangan 1MDB untuk menyelesaikan hutang syarikat adalah seperti berikut…” or “the plan to resolve 1MDB’s debts are as follows”.
And the Minister goes on to tell the story of how selling the Edra Energy, 1MDB’s real estate properties and the investment ‘units’ will pay for the 1MDB debts. He might as well have added that the sun rises from the east and sets in the west.
The Minister’s answer could have been less than 10 words, and it would have answered my question perfectly. Value of units, and name of bank.
Is the Finance Minister that stupid that he could not understand simple English or Malay? Or he is trying his best to pretend to be a complete nitwit so that he doesn’t have to answer a very simple question from a Member of Parliament? Either way, the Finance Minister has show utter contempt for the Parliament.
Malaysians have the right to know the status of USD940 million worth of investment ‘units’ held by Brazen Sky Ltd. It’s not like the question has never been answered in Parliament before.
Current and former finance ministers, as well as 1MDB, itself had openly stated that the company had investments in the form of ‘units’ held with a ‘custodian bank’ previously valued at US$2.3 billion, of which a substantial portion has apparently been redeemed.
1MDB has in April this year, further emphasized that the investment ‘units’ would be “monetized” to repay Abu Dhabi’s IPIC the sum of US$1.2 billion. Hence, it is an extremely valid question to ask what is the current value of these units which are previously held in BSI Bank, Singapore.
However, more than a year after BSI lost its license in Singapore, and we are still looking for the same answers regarding Brazen Sky’s accounts. Who is its new ‘custodian’ bank and what is the status of its units?
Or are Malaysians to assume that the refusal of the Finance Minister to answer the above question is evidence that the ‘units’ are indeed a fraud as suspected with little or no value, and it’s current not held in any bank around the world?
Tony Pua meminta Menteri Kewangan menyatakan baki nilai terkini pelaburan ‘unit’ yang dimiliki oleh anak syarikat 1MDB, Brazen Sky Limited dan nama institusi bank atau kewangan yang kini menjadi ‘custodian’ kepada pelaburan tersebut.
This question was rejected by the Speaker during the last sitting in July with the utterly ridiculous excuse that it was “buah fikiran” or basically a figment of my imagination. I’m grateful that the second attempt at posing this question to the Finance Minister has been accepted.
However, my joy was shortlived. I’ve received the reply dated 30 October 2017 from the Minister of Finance yesterday (attached). It was the stupidest “pretend to be stupid” reply I have ever received from any Minister in my 9 and the half years in Parliament.
My question asked what is the current value of “units” and who is the custodian bank. The reply start with “rancangan 1MDB untuk menyelesaikan hutang syarikat adalah seperti berikut…” or “the plan to resolve 1MDB’s debts are as follows”.
And the Minister goes on to tell the story of how selling the Edra Energy, 1MDB’s real estate properties and the investment ‘units’ will pay for the 1MDB debts. He might as well have added that the sun rises from the east and sets in the west.
The Minister’s answer could have been less than 10 words, and it would have answered my question perfectly. Value of units, and name of bank.
Is the Finance Minister that stupid that he could not understand simple English or Malay? Or he is trying his best to pretend to be a complete nitwit so that he doesn’t have to answer a very simple question from a Member of Parliament? Either way, the Finance Minister has show utter contempt for the Parliament.
Malaysians have the right to know the status of USD940 million worth of investment ‘units’ held by Brazen Sky Ltd. It’s not like the question has never been answered in Parliament before.
Current and former finance ministers, as well as 1MDB, itself had openly stated that the company had investments in the form of ‘units’ held with a ‘custodian bank’ previously valued at US$2.3 billion, of which a substantial portion has apparently been redeemed.
1MDB has in April this year, further emphasized that the investment ‘units’ would be “monetized” to repay Abu Dhabi’s IPIC the sum of US$1.2 billion. Hence, it is an extremely valid question to ask what is the current value of these units which are previously held in BSI Bank, Singapore.
However, more than a year after BSI lost its license in Singapore, and we are still looking for the same answers regarding Brazen Sky’s accounts. Who is its new ‘custodian’ bank and what is the status of its units?
Or are Malaysians to assume that the refusal of the Finance Minister to answer the above question is evidence that the ‘units’ are indeed a fraud as suspected with little or no value, and it’s current not held in any bank around the world?
Tuesday, October 31, 2017
Najib’s toll freebie meant to entice Harapan supporters will only going to cost BN voters more
In Friday’s 2018 Budget speech, one of the big “goodies” that the Prime Minister announced was the abolishment of 4 tolls at Sg Rasau, Batu Tiga, Bukit Kayu Hitam and on the Eastern Dispersal Link (EDL).
On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.
However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.
The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.
This simply means that Malaysians will end paying toll fares for longer periods.
More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.
The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.
Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country. It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.
That however, isn’t the whole story.
The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway. MRCB also doesn’t own any other highway assets.
Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB. Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.
The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.
On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.
However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.
The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.
This simply means that Malaysians will end paying toll fares for longer periods.
More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.
The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.
Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country. It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.
That however, isn’t the whole story.
The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway. MRCB also doesn’t own any other highway assets.
Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB. Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.
The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.
Monday, October 30, 2017
Minister of Finance confirms that EPF has not confirmed or approved any specific investments amounting to USD3 to 4 bil. in the US, contradicting the Prime Minister's boast to President Trump
The Prime Minister, Dato’ Seri Najib Razak went to the United States (US) last month and wasted no time impressing on President Donald Trump that he is out to boost the US economy. He said “Number one, we want to help you in terms of strengthening the US economy.”
Among the most controversial and very specific promise by Dato’ Seri Najib was for the Malaysian Employees Provident Fund (EPF) to investment an additional “three to four billion dollars” to “support... infrastructure redevelopment in the United States.”
I had asked in my parliamentary question to the Minister of Finance whether the EPF has already specific projects amounting to “three to four billion dollars” to “support infrastructure redevelopment in the United States”. I further asked, if yes, how much have been approved.
In a relatively lengthy reply received from the Minister of Finance dated 25 October (attached), he effectively confirmed that EPF has made no such specific decision to invest “three to four billion dollars” to “support infrastructure redevelopment in the United States”.
The reply stated that every EPF investment is evaluated on a case by case basis on strict, disciplined and diligent criteria.
The reply did try to play down the Prime Minister’s promises to the American President by claiming that what he said was “consistent with the long term strategy of the EPF to increase its overseas investment, particularly in property and infrastructure”. The Minister of Finance also tried to justify property and infratructure projects are relatively low-risk investment providing a relatively good rate of return.
However, my question has absolutely nothing to do with what forms of investment provides better or safer returns. My question is specifically on whether EPF has already decided to make the specific US$3 billion, possibly up to US$4 billion of investment to “support… infrastructure redevelopment in the United States.”
Malaysians are relieved that the EPF will not be making any rash investments in the United States, more so inexplicably to “support… infrastructure redevelopment in the United States”. It is not our job to “make America great again”.
We have no objections to EPF investment a proportion of its funds overseas, as long as the risks involved are properly mitigated and the investments are evaluated on strict and diligent criteria.
However, the above proved that our Prime Minister boasted empty promises to the American President. The question then is, why did Dato’ Seri Najib Razak have to go out of his way to impress the Trump administration?
The answer appears to be obvious, from his stay the the Trump Hotel to his boasts at the White House, the Prime Minister pulled out all stops to curry favour the American President in order to hope that the United States government will go easy on the single largest anti-kleptocracy money laundering seizure in the country.
Among the most controversial and very specific promise by Dato’ Seri Najib was for the Malaysian Employees Provident Fund (EPF) to investment an additional “three to four billion dollars” to “support... infrastructure redevelopment in the United States.”
I had asked in my parliamentary question to the Minister of Finance whether the EPF has already specific projects amounting to “three to four billion dollars” to “support infrastructure redevelopment in the United States”. I further asked, if yes, how much have been approved.
Tony Pua meminta Menteri Kewangan menyatakan sama ada jawatankuasa Kumpulan Wang Simpanan Pekerja (KWSP) telah meluluskan pelaburan sebanyak US$3 sehingga US$4 bilion bagi tujuan menyokong pembangunan semula infrastruktur di Amerika Syarikat. Jika ada, apakah nilai pelaburan-pelaburan spesifik ini yang telah diluluskan.
In a relatively lengthy reply received from the Minister of Finance dated 25 October (attached), he effectively confirmed that EPF has made no such specific decision to invest “three to four billion dollars” to “support infrastructure redevelopment in the United States”.
The reply stated that every EPF investment is evaluated on a case by case basis on strict, disciplined and diligent criteria.
The reply did try to play down the Prime Minister’s promises to the American President by claiming that what he said was “consistent with the long term strategy of the EPF to increase its overseas investment, particularly in property and infrastructure”. The Minister of Finance also tried to justify property and infratructure projects are relatively low-risk investment providing a relatively good rate of return.
However, my question has absolutely nothing to do with what forms of investment provides better or safer returns. My question is specifically on whether EPF has already decided to make the specific US$3 billion, possibly up to US$4 billion of investment to “support… infrastructure redevelopment in the United States.”
Malaysians are relieved that the EPF will not be making any rash investments in the United States, more so inexplicably to “support… infrastructure redevelopment in the United States”. It is not our job to “make America great again”.
We have no objections to EPF investment a proportion of its funds overseas, as long as the risks involved are properly mitigated and the investments are evaluated on strict and diligent criteria.
However, the above proved that our Prime Minister boasted empty promises to the American President. The question then is, why did Dato’ Seri Najib Razak have to go out of his way to impress the Trump administration?
The answer appears to be obvious, from his stay the the Trump Hotel to his boasts at the White House, the Prime Minister pulled out all stops to curry favour the American President in order to hope that the United States government will go easy on the single largest anti-kleptocracy money laundering seizure in the country.
Friday, October 27, 2017
Despite 2 years after the implementation of the Goods and Services Tax, Budget 2018 projects increasing reliance on income taxes
Dato’ Seri Najib Razak proudly announced that the projected budget deficit for 2018 will be 2.8% compared to 3.0% expected for 2017.
However, this target is to be achieved not via more prudent spending but significantly higher government revenue collection. As previously expressed by the Prime Minister, his administration has been “saved” by the implementation of the Goods & Services Tax (GST).
The GST is expected to contribute RM41.5 billion to the treasury coffers in 2017, and further increase to RM43.8 billion in 2018. This compares against income from Sales and Services Tax (SST) last collected from Malaysians in 2014 which amounted to RM17.1 billion.
However, despite the massive increase in Government revenues resulting from the GST, there was no reprieve for individual and corporate income tax payers. In fact, it has become increasingly painful for Malaysian income tax payers.
For individuals, income tax contributions increased by 4.7% from 2015 to 2016. However, for this year (2017), individual income tax contributions will increase by a massive 9.2% to RM30.1 billion. For 2018, individual income tax collection for the Government will increase by another 7.1% to RM32.2 billion. This is inspite of the proposed 2% decrease in income tax rates for taxable income up to RM70,000 per annum.
For corporate tax payers, the increase in burden isn’t any less. While corporate taxes dropped by 0.1% from 2015 to 2016, it is expected to increase by 6.6% to RM67.8 billion this year. Next year, the increase is even more, at a projected 6.9% to RM72.5 billion.
The above increases in individual and corporate income taxes are disproportionately higher than the 4-5% economic growth rates for Malaysia.
The above lends credence to the widespread discontent against the Inland Revenue Board (LHDN) for their heavy-handed tactics in squeezing substantially higher tax contributions from individuals and businesses. Some have even termed LHDN’s tactics as “tax terrorism” by demanding, with hardly any room for negotiation, backdated taxes of up to 10 years.
The above Budget proved that the Najib administration has not seriously implemented policies to impose prudence in spending. Instead, it is relying almost entirely on increasing taxes to balance its books instead of cutting wastage, eliminating corruption and reducing the cost of government.
As a whole, this is reflected in the significant increase in the Federal Government operating expenditure which is expected to increase by RM14.4 billion 6.5% to RM234.3 billion in 2018. In contrast, the increase in only by RM9.7 billion or 4.6% in 2017; while in 2016, the operating expenditure actually reduced by 3.1%.
In addition, the operating expenditure as a proportion to total expenditure continued its increase to 83.6%, the highest in Malaysian budget history.
Dato’ Seri Najib Razak’s 2018 budget speech, like the year before, was littered with political sniping and peppered with a litany of election year goodies. It contained no meaningful reforms in economic policies and institutions to end corruption and wastage.
The 2018 Budget only served to prove the widespread fears that as long as there are no such serious reforms in place, ordinary Malaysians will be forced to bear increasing higher tax contributions – whether it is via the GST, individual or corporate income taxes.
However, this target is to be achieved not via more prudent spending but significantly higher government revenue collection. As previously expressed by the Prime Minister, his administration has been “saved” by the implementation of the Goods & Services Tax (GST).
The GST is expected to contribute RM41.5 billion to the treasury coffers in 2017, and further increase to RM43.8 billion in 2018. This compares against income from Sales and Services Tax (SST) last collected from Malaysians in 2014 which amounted to RM17.1 billion.
However, despite the massive increase in Government revenues resulting from the GST, there was no reprieve for individual and corporate income tax payers. In fact, it has become increasingly painful for Malaysian income tax payers.
For individuals, income tax contributions increased by 4.7% from 2015 to 2016. However, for this year (2017), individual income tax contributions will increase by a massive 9.2% to RM30.1 billion. For 2018, individual income tax collection for the Government will increase by another 7.1% to RM32.2 billion. This is inspite of the proposed 2% decrease in income tax rates for taxable income up to RM70,000 per annum.
For corporate tax payers, the increase in burden isn’t any less. While corporate taxes dropped by 0.1% from 2015 to 2016, it is expected to increase by 6.6% to RM67.8 billion this year. Next year, the increase is even more, at a projected 6.9% to RM72.5 billion.
The above increases in individual and corporate income taxes are disproportionately higher than the 4-5% economic growth rates for Malaysia.
The above lends credence to the widespread discontent against the Inland Revenue Board (LHDN) for their heavy-handed tactics in squeezing substantially higher tax contributions from individuals and businesses. Some have even termed LHDN’s tactics as “tax terrorism” by demanding, with hardly any room for negotiation, backdated taxes of up to 10 years.
The above Budget proved that the Najib administration has not seriously implemented policies to impose prudence in spending. Instead, it is relying almost entirely on increasing taxes to balance its books instead of cutting wastage, eliminating corruption and reducing the cost of government.
As a whole, this is reflected in the significant increase in the Federal Government operating expenditure which is expected to increase by RM14.4 billion 6.5% to RM234.3 billion in 2018. In contrast, the increase in only by RM9.7 billion or 4.6% in 2017; while in 2016, the operating expenditure actually reduced by 3.1%.
In addition, the operating expenditure as a proportion to total expenditure continued its increase to 83.6%, the highest in Malaysian budget history.
Dato’ Seri Najib Razak’s 2018 budget speech, like the year before, was littered with political sniping and peppered with a litany of election year goodies. It contained no meaningful reforms in economic policies and institutions to end corruption and wastage.
The 2018 Budget only served to prove the widespread fears that as long as there are no such serious reforms in place, ordinary Malaysians will be forced to bear increasing higher tax contributions – whether it is via the GST, individual or corporate income taxes.
With outrageously creative accounting and a preposterous tax-payers’ bailout admitted by 1MDB itself, perhaps 1MDB will indeed be “on track to realise a profit”.
On Wednesday, I had accused the Prime Minister of peddling lies with the outrageous claim that 1MDB “is on track to realise a profit”, when 1MDB is nothing but a shell today laden with some RM40 billion of outstanding debt (including debts that have been assumed by the Ministry of Finance (MoF) over the past year).
1MDB tried vainly to defend the Prime Minister yesterday by spewing another set of half-truths and establish new standards of creative accounting.
I had, not for the first time, argued that 1MDB made some RM2.3 billion of losses from the sale of its acquired power plants to China General Nuclear Corporation. And not for the first time, 1MDB tried to argue that 1MDB didn’t lose money because of dividends purportedly received from the energy subsidiaries.
Let me remind the CEO of 1MDB, Arul Kanda again - he had conceded to the Public Accounts Committee (PAC) that were the purported RM2.18b in dividends to be counted, he also needs to account for the huge RM3.5 billion in interest costs on the loan is taken to purchase those assets in the first place.
Only a half-baked CEO would tell his shareholders that he made money from the dividends, without taking into account the massive interest bill which was substantially higher than the purported dividends!
Worse, when I checked the financial statements of 1MDB’s energy subsidiaries, there was not a single year where they declared dividends to their 1MDB parent. This meant that Arul Kanda cooked up the entire ‘dividend’ bullshit.
The Prime Minister himself declared that the proposed 1MDB rationalisation exercise practically ‘complete’ way back on 31 December 2015. He said then, “it is therefore clear that 1MDB’s major challenges are now behind it as I promised they would be last summer.”
Except two years later, the plans are not only far from complete, they have completely unravelled.
As I’ve already highlighted previously, the RM7.41 billion deal to sell 60% of Bandar Malaysia which was the pillar of the 1MDB rationalisation exercise, has collapse spectacularly with no end in sight.
1MDB which had no ability to develop the massive property project had surrendered Bandar Malaysia back to the MoF, as proposed by the Public Accounts Committee (PAC). And as 1MDB rightly pointed out, I was part of the committee which made the particular recommendation.
However, what PAC did not at any point in time recommend for the RM2.4 billion sukuk bond 1MDB borrowed for Bandar Malaysia to be also handed to MoF. This is because the Auditor-General has confirmed that hardly a single sen from the above bond was actually spent for the purposes of the Bandar Malaysia project – a fact which was also conceded by Arul Kanda to the PAC.
Most shockingly however, as admitted explicitly for the first time by 1MDB in its statement to condemn me, was that 1MDB is expecting to “receive payments, over time” from MoF for the above debt-laden asset transfers.
In layman terms, it means that not only the tax-payers were forced to assume 1MDB’s debt, we bloody fools have to even pay 1MDB to assume these debts!
The above doesn’t yet include the fact that MoF has only recently in August, directly or indirectly bailed out 1MDB by making some US$600 million (RM2.5 billion) in settlement payments to Abu Dhabi’s IPIC.
Perhaps, I was wrong after all. Despite being a shell laden with some RM40 billion of debts, Dato’ Seri Najib Razak was right to say that 1MDB “is on track to realise a profit” – with outrageously creative accounting and a preposterous tax-payers’ bailout.
1MDB tried vainly to defend the Prime Minister yesterday by spewing another set of half-truths and establish new standards of creative accounting.
I had, not for the first time, argued that 1MDB made some RM2.3 billion of losses from the sale of its acquired power plants to China General Nuclear Corporation. And not for the first time, 1MDB tried to argue that 1MDB didn’t lose money because of dividends purportedly received from the energy subsidiaries.
Let me remind the CEO of 1MDB, Arul Kanda again - he had conceded to the Public Accounts Committee (PAC) that were the purported RM2.18b in dividends to be counted, he also needs to account for the huge RM3.5 billion in interest costs on the loan is taken to purchase those assets in the first place.
Only a half-baked CEO would tell his shareholders that he made money from the dividends, without taking into account the massive interest bill which was substantially higher than the purported dividends!
Worse, when I checked the financial statements of 1MDB’s energy subsidiaries, there was not a single year where they declared dividends to their 1MDB parent. This meant that Arul Kanda cooked up the entire ‘dividend’ bullshit.
The Prime Minister himself declared that the proposed 1MDB rationalisation exercise practically ‘complete’ way back on 31 December 2015. He said then, “it is therefore clear that 1MDB’s major challenges are now behind it as I promised they would be last summer.”
Except two years later, the plans are not only far from complete, they have completely unravelled.
As I’ve already highlighted previously, the RM7.41 billion deal to sell 60% of Bandar Malaysia which was the pillar of the 1MDB rationalisation exercise, has collapse spectacularly with no end in sight.
1MDB which had no ability to develop the massive property project had surrendered Bandar Malaysia back to the MoF, as proposed by the Public Accounts Committee (PAC). And as 1MDB rightly pointed out, I was part of the committee which made the particular recommendation.
However, what PAC did not at any point in time recommend for the RM2.4 billion sukuk bond 1MDB borrowed for Bandar Malaysia to be also handed to MoF. This is because the Auditor-General has confirmed that hardly a single sen from the above bond was actually spent for the purposes of the Bandar Malaysia project – a fact which was also conceded by Arul Kanda to the PAC.
Most shockingly however, as admitted explicitly for the first time by 1MDB in its statement to condemn me, was that 1MDB is expecting to “receive payments, over time” from MoF for the above debt-laden asset transfers.
In layman terms, it means that not only the tax-payers were forced to assume 1MDB’s debt, we bloody fools have to even pay 1MDB to assume these debts!
The above doesn’t yet include the fact that MoF has only recently in August, directly or indirectly bailed out 1MDB by making some US$600 million (RM2.5 billion) in settlement payments to Abu Dhabi’s IPIC.
Perhaps, I was wrong after all. Despite being a shell laden with some RM40 billion of debts, Dato’ Seri Najib Razak was right to say that 1MDB “is on track to realise a profit” – with outrageously creative accounting and a preposterous tax-payers’ bailout.
Thursday, October 26, 2017
Dato’ Seri Najib Razak is clutching at straws arguing that the ringgit has performed well this year when it has barely recovered a fraction of its losses since 2013
Dato’ Seri Najib Razak wants Malaysians to believe that “the ringgit had performed better than the currencies of many other large commodity exporter countries, and forecasters had predicted that it will regain its strength”.
Is the Prime Minister trying to convince us that the 5.9% appreciation of the ringgit from RM4.49 to the dollar on 1 January 2017 to RM4.24 today is an achievement worthy of a standing ovation from Malaysians?
Does he need reminding that when he became the Prime Minister on 9 April 2009, the exchange rate was RM3.58 to the dollar or 18% higher than what it is today? As a matter of fact, since the 2013 general election, the ringgit has tanked significantly on an annual basis.
In 2014, the ringgit slumped 6.3% from 3.281 on 1 January to 3.502 a dollar on 31 December.
The Prime Minister had then told us in January 2015 that the Ringgit will bounce back from the then five-year low versus the US dollar as “Malaysia's financial market is sufficiently robust”. Believe it or not, the Ringgit was then trading at 3.50 to the Dollar, which now seemed like a parallel universe away.
Instead, in 2015, the ringgit collapsed 18.5% to 4.303 a dollar on 31 December.
Even then, despite continued re-assurance from the Government and Bank Negara that our currency was undervalued and unjustifiably depreciated for those 2 years, the ringgit tanked a further 9.6% in 2016.
If we had all trusted Dato’ Seri Najib Razak and invested based on his financial advice, some of us would be bordering on suicidal tendencies today.
The thing is, if every other currency had declined at the same rate against the Dollar, it wouldn’t have felt so bad. What is particularly galling is that the Ringgit performance is the worst among all the major regional currencies over the past few years. We have weakened significantly against the Hong Kong and Singapore dollar, the Thai baht, the Indonesian rupiah, the Chinese yuan and many more. Hence the Prime Minister’s call for a celebration for a marginal improvement in the exchange rates this year is a serious case of clutching at straws.
It appears that everyone knows the real cause of the ringgit’s terrible performance except our clueless or pretend-to-be-clueless Prime Minister and his merry men. The fundamental cause is because of the complete collapse in confidence in our currency and economy ever since we have been outed as a major global kleptocracy and the failure of the Malaysian authorities and Government to take any action against those responsible.
The direct consequence of a badly depreciated ringgit is not only significantly higher travel cost overseas, it is the much higher cost of imports which translates into the highest inflation rates Malaysia is facing since the last global financial subprime crisis.
We cannot let Najib’s focus on the Ringgit’s short-term improvements distract us from the bigger picture. In order for the Ringgit to recover to RM3 to the dollar, the only way will be to rid the country of a kleptocratic administration and implement clean, transparent and competitive economic policies to bring back the confidence of local and foreign investors in Malaysia.
Is the Prime Minister trying to convince us that the 5.9% appreciation of the ringgit from RM4.49 to the dollar on 1 January 2017 to RM4.24 today is an achievement worthy of a standing ovation from Malaysians?
Does he need reminding that when he became the Prime Minister on 9 April 2009, the exchange rate was RM3.58 to the dollar or 18% higher than what it is today? As a matter of fact, since the 2013 general election, the ringgit has tanked significantly on an annual basis.
In 2014, the ringgit slumped 6.3% from 3.281 on 1 January to 3.502 a dollar on 31 December.
The Prime Minister had then told us in January 2015 that the Ringgit will bounce back from the then five-year low versus the US dollar as “Malaysia's financial market is sufficiently robust”. Believe it or not, the Ringgit was then trading at 3.50 to the Dollar, which now seemed like a parallel universe away.
Instead, in 2015, the ringgit collapsed 18.5% to 4.303 a dollar on 31 December.
Even then, despite continued re-assurance from the Government and Bank Negara that our currency was undervalued and unjustifiably depreciated for those 2 years, the ringgit tanked a further 9.6% in 2016.
If we had all trusted Dato’ Seri Najib Razak and invested based on his financial advice, some of us would be bordering on suicidal tendencies today.
The thing is, if every other currency had declined at the same rate against the Dollar, it wouldn’t have felt so bad. What is particularly galling is that the Ringgit performance is the worst among all the major regional currencies over the past few years. We have weakened significantly against the Hong Kong and Singapore dollar, the Thai baht, the Indonesian rupiah, the Chinese yuan and many more. Hence the Prime Minister’s call for a celebration for a marginal improvement in the exchange rates this year is a serious case of clutching at straws.
It appears that everyone knows the real cause of the ringgit’s terrible performance except our clueless or pretend-to-be-clueless Prime Minister and his merry men. The fundamental cause is because of the complete collapse in confidence in our currency and economy ever since we have been outed as a major global kleptocracy and the failure of the Malaysian authorities and Government to take any action against those responsible.
The direct consequence of a badly depreciated ringgit is not only significantly higher travel cost overseas, it is the much higher cost of imports which translates into the highest inflation rates Malaysia is facing since the last global financial subprime crisis.
We cannot let Najib’s focus on the Ringgit’s short-term improvements distract us from the bigger picture. In order for the Ringgit to recover to RM3 to the dollar, the only way will be to rid the country of a kleptocratic administration and implement clean, transparent and competitive economic policies to bring back the confidence of local and foreign investors in Malaysia.
Wednesday, October 25, 2017
Dato’ Seri Najib Razak is the biggest purveyor of ‘fake news’ by singing 1MDB's praises in his blog but has no courage to debate the mother of all scandals in Parliament
On his blog yesterday, Najib gave us his economic vision for the country ahead of the 2018 Budget announcement on Friday.
However, the entire credibility of his “economic vision” collapsed with the outrageous claim that 1MDB has not only “brought the country good” but “is on track to realise a profit”.
1MDB is currently an empty shell, holding absolutely nothing but some RM40 billion of debts. How in the world is 1MDB “on track to realise a profit”?! If this is not a brazen attempt by the Prime Minister to create ‘fake news’, what is?
Dato’ Seri Najib argued that it was 1MDB which solved the lop-sided power purchase agreements attributed to the previous BN Prime Minister.
We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before. However, Malaysians are still clueless as to how 1MDB apparently “solved” the above injustice.
As far as we are concerned, Malaysians didn’t enjoy a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs. Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.3 billion.
Dato’ Seri Najib Razak further told Malaysians to laud 1MDB for its Corporate Social Responsibility (CSR) work including its sponsorship of hajj pilgrimages and scholarships purportedly amounting to RM690 million.
What the Prime Minister failed to tell Malaysians is that the so-called CSR is funded entirely with government-guaranteed debt amounting to more than RM40 billion.
More pertinently, while RM690 million of the debt may have found its way to CSR initiatives, US$732 million or approximately RM3 billion found its way from 1MDB to Dato’ Seri Najib Razak’s personal bank account in Ambank between 2011 to 2014. The Prime Minister has to date failed to debunk this expose by the US Depart of Justice.
Najib must think Malaysians fools to believe in all his outrageous lies.
If the Prime Minister really thinks that 1MDB has been the saviour of Malaysia, then he should immediately lift the ban on sensitive 1MDB questions raised in the august House. Instead, he should table a Ministerial Statement to ‘debunk’ all the so-called ‘lies’ by the members of the opposition and allow for a full debate on the 1MDB scandal.
However, if Dato’ Seri Najib Razak chooses not to be accountable in Parliament, then he will prove himself to be the most corrupt and cowardly Prime Minister in the history of Malaysia who relies on the BN-controlled mainstream media to propound his ‘fake news’.
However, the entire credibility of his “economic vision” collapsed with the outrageous claim that 1MDB has not only “brought the country good” but “is on track to realise a profit”.
1MDB is currently an empty shell, holding absolutely nothing but some RM40 billion of debts. How in the world is 1MDB “on track to realise a profit”?! If this is not a brazen attempt by the Prime Minister to create ‘fake news’, what is?
Dato’ Seri Najib argued that it was 1MDB which solved the lop-sided power purchase agreements attributed to the previous BN Prime Minister.
We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before. However, Malaysians are still clueless as to how 1MDB apparently “solved” the above injustice.
As far as we are concerned, Malaysians didn’t enjoy a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs. Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.3 billion.
Dato’ Seri Najib Razak further told Malaysians to laud 1MDB for its Corporate Social Responsibility (CSR) work including its sponsorship of hajj pilgrimages and scholarships purportedly amounting to RM690 million.
What the Prime Minister failed to tell Malaysians is that the so-called CSR is funded entirely with government-guaranteed debt amounting to more than RM40 billion.
More pertinently, while RM690 million of the debt may have found its way to CSR initiatives, US$732 million or approximately RM3 billion found its way from 1MDB to Dato’ Seri Najib Razak’s personal bank account in Ambank between 2011 to 2014. The Prime Minister has to date failed to debunk this expose by the US Depart of Justice.
Najib must think Malaysians fools to believe in all his outrageous lies.
If the Prime Minister really thinks that 1MDB has been the saviour of Malaysia, then he should immediately lift the ban on sensitive 1MDB questions raised in the august House. Instead, he should table a Ministerial Statement to ‘debunk’ all the so-called ‘lies’ by the members of the opposition and allow for a full debate on the 1MDB scandal.
However, if Dato’ Seri Najib Razak chooses not to be accountable in Parliament, then he will prove himself to be the most corrupt and cowardly Prime Minister in the history of Malaysia who relies on the BN-controlled mainstream media to propound his ‘fake news’.
Saturday, October 21, 2017
Why is the MCMC quick to the draw when the Prime Minister is ‘insulted’ on Facebook, but completely silent when tens of millions of private, and possibly confidential data have been stolen?
Lowyat.net reported on Thursday alledged that stolen personal data belonging to millions of Malaysia were up for sale publicly. However, instead of coming out with an investigation into the matter, the regulator MCMC demanded that Lowyat.net remove its report.
The the now ‘deleted’ report exposed that the data includes personal data sourced from various telecommunication providers, medical associations and housing loan providers. The data being sold was reportedly stolen between 2012 and 2015. This data could include citizens’ private bank details, mobile phone numbers, addresses and emails. Clearly, the magnitude of this sale of Malaysians’ private data should be a cause for concern as it concerns.
Why is the first move by the authorities at MCMC to block the report? Why is it that after 2 days, MCMC has yet to make any comment on the issue? Is it because the public sale of stolen personal data also exposed how MCMC is utterly toothless in enforcing the Personal Data Protect Act passed in Parliament in 2010?
Or is the MCMC protecting all the 'big' players in the market from telecommunication companies to banks to government agencies from being charged for breaking the law, by failing to take adequate measures to protect the privacy of their customers' data?
The complete silence by MCMC contrasts against the series of lightning quick and harsh actions taken against individuals who were merely expressing their anger and frustration at the state of affairs in this country by hurling insults at the Prime Minister or the Government on Facebook or Twitter.
Many of these individuals have been investigated and charged under Section 233 of the Communications and Multimedia Act 1998 which provides for a maximum fine of RM50,000 or jail of not more than a year or both, if convicted. In addition, MCMC wasted no time blocking access to multiple blogs and websites which have exposed scandals of the Prime Minister, such as Sarawak Report and The Malaysian Insider, whereby most, if not all, of the allegations have proven true
It would appear that MCMC treats itself as a political watch dog for Dato’ Seri Najib Razak and Barisan Nasional, instead of playing its role to protect the interest of ordinary Malaysians.
MCMC and the Ministry of Information and Communications need to provide Malaysians with an assurance that our private data online is being protected and breaches are investigated thoroughly. Perhaps, instead of political policing, it is time they focused on policing cyber threats and protecting Malaysians’ privacy.
The the now ‘deleted’ report exposed that the data includes personal data sourced from various telecommunication providers, medical associations and housing loan providers. The data being sold was reportedly stolen between 2012 and 2015. This data could include citizens’ private bank details, mobile phone numbers, addresses and emails. Clearly, the magnitude of this sale of Malaysians’ private data should be a cause for concern as it concerns.
Why is the first move by the authorities at MCMC to block the report? Why is it that after 2 days, MCMC has yet to make any comment on the issue? Is it because the public sale of stolen personal data also exposed how MCMC is utterly toothless in enforcing the Personal Data Protect Act passed in Parliament in 2010?
Or is the MCMC protecting all the 'big' players in the market from telecommunication companies to banks to government agencies from being charged for breaking the law, by failing to take adequate measures to protect the privacy of their customers' data?
The complete silence by MCMC contrasts against the series of lightning quick and harsh actions taken against individuals who were merely expressing their anger and frustration at the state of affairs in this country by hurling insults at the Prime Minister or the Government on Facebook or Twitter.
Many of these individuals have been investigated and charged under Section 233 of the Communications and Multimedia Act 1998 which provides for a maximum fine of RM50,000 or jail of not more than a year or both, if convicted. In addition, MCMC wasted no time blocking access to multiple blogs and websites which have exposed scandals of the Prime Minister, such as Sarawak Report and The Malaysian Insider, whereby most, if not all, of the allegations have proven true
It would appear that MCMC treats itself as a political watch dog for Dato’ Seri Najib Razak and Barisan Nasional, instead of playing its role to protect the interest of ordinary Malaysians.
MCMC and the Ministry of Information and Communications need to provide Malaysians with an assurance that our private data online is being protected and breaches are investigated thoroughly. Perhaps, instead of political policing, it is time they focused on policing cyber threats and protecting Malaysians’ privacy.
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