MP SPEAKS The Parliamentary Accounts Committee (PAC) will be meeting tomorrow, March 18, 2015 to discuss the issues raised in the Auditor-General’s Report 2013 3rd Series on Pembinaan PFI Sdn Bhd, a 99.99 percent Ministry of Finance incorporated company which had accumulated liabilities of RM27.9 billion at the end of 2012.
Here are the following questions which the PAC needs to ask Mohd Irwan Serigar Abdullah in his capacity as one of the directors of Pembinaan PFI Sdn Bhd and also the secretary-general of the Finance Ministry.
1) Pembinaan PFI’s name seems to indicate that the projects undertaken were being financed via Private Finance Initiatives (PFIs) with the private sector bearing some of the capital expenditure and risk of the projects. Were the projects being funded by Pembinaan PFI considered as Private Finance Initiatives and if so, who were the private entities involved in bearing some of the capital expenditure for these projects?
2) Were the projects that were funded by Pembinaan PFI awarded via open tender through the MyProcurement website or were they awarded via direct negotiation?
3) What was the rationale of using Pembinaan PFI as a channel to fund these development projects rather than going through the conventional channel of the regular development expenditure in the government budget?
4) Who was in the management team of Pembinaan PFI? Who is the management team at Pembinaan PFI? Why wasn’t a website set up like Pembinaan BLT to increase transparency about the activities carried out by Pembinaan PFI as well as the identities of the management team and the projects it was carrying out?
5) Pembinaan PFI first took up a RM20 billion loan from the Employees Provident Fund (EPF) in August 2007 that was due to be paid in lump sum plus interest in August 2012. But this loan was restructured in August 2012 to bi-annual payments for 15 years (until 2027).
This money would come from the Federal Land Commissioner (FLC) which had leased federal land to Pembinaan PFI and then paid rental for this land to Pembinaan PFI as part of a lease back agreement. Why was such a complicated method used to pay back EPF? Why wasn’t the RM20 billion plus interest just paid back in full in August 2012?
Vehicle to pay back Pembinaan PFI debts?
6) Why is the Federal Land Commissioner (FLC) being used as a vehicle to pay back the debts of Pembinaan PFI? How much land will the FLC have to sell in order to fund the debts of Pembinaan PFI? Does the FLC have the revenue to fund the approximately RM2 billion of annual payments to EPF for the next 15 years for the RM20 billion loan taken out by Pembinaan PFI?
7) The auditor-general reported in that at the end of 2013, RM18.6 billion from the original RM20 billion loan from EPF had been spent by Pembinaan PFI. However, the amount of actual spending on the projects listed in the Audit Report only came up to RM1.2 billion (See Jadual 2.48 below). Where did the rest of the RM17.4 billion spending go towards?
8) Can the Finance Ministry produce a list of all the projects plus the name of the contractor, the cost and the status of each of the projects that have been funded by Pembinaan PFI since its creation?
9) The last Annual Return for Pembinaan PFI was for the financial year 2012. The date of the Annual Return was the 28th of June 2013. The returns were submitted on Feb 12, 2014. The Annual Return for Pembinaan PFI for 2013 should have been completed at the end of June 2014. But as of today, March 17, 2015, almost nine months later, the annual returns for 2013 has not been submitted. Why this delay?
10) According to Pembinaan PFI’s filings with the Companies Commission of Malaysia (CCM), it took out a Bai Muajjal Islamic facility / loan of RM19.5 billion from EPF in August 2014. How is Pembinaan PFI going to pay the charges for this facility?
DR ONG KIAN MING is the MP for Serdang.
