Only 40 percent of federal allocations for water infrastructure projects in Sabah reached the projects that the money was earmarked for, according to a report today.

“And the rest of the money seemed to have been pocketed by individuals,” reported The Star, quoting an unnamed senior state government official.

The official is said to have knowledge of developments in the investigations against Sabah Water Department director Ag Tahir Ag Talib, and his deputy Teo Chee Kong, who had been arrested by the Malaysian Anti-Corruption Commission (MACC) on suspicion of graft on Wednesday.

The duo are said to have handled RM3.3 billion in basic infrastructure projects since 2010.

In what has been hailed as the biggest haul ever by the MACC, the commission had seized close to RM53 million in cash, nine luxury cars, branded watches and 127 land grants.

Also seized in the operation are 19.3kg in jewellery estimated to be worth RM3.64 million, and 94 handbags for their wives.

The Star said Sabah Water Department’s tender process is believed to have been ‘fixed’ so that proxy companies would be awarded projects at inflated prices.

Quoting MACC deputy chief commissioner (operations) Azam Baki, the report said the duo have 38 companies owned by their friends and families.

In addition, the projects are often broken up into smaller parcels up to RM100,000 to avoid the tender process altogether, as the director or his deputy can sign off the projects by themselves, the report said.