KINIBIZ Last August, the Federal Lands Commissioner (FLC) paid RM1.13 billion in rent for using some 186 land parcels across Malaysia.
Come next February, it would have to pay another RM1.12 billion, continuing a biannual rent-payment cycle that would only end in 2027 after more than RM29 billion is paid.
But the FLC had been using the same land parcels without any sort of rent before 2013. So why is it paying rent now and to whom?
The answer points to a strangely convoluted deal pushed through by the government following the establishment of Pembinaan PFI Sdn Bhd, a special-purpose vehicle wholly owned by the Ministry of Finance (MOF).
PFI is an acronym for ‘private finance initiative’, a concept which drives public infrastructure developments via privately sourced capital. This concept was announced in the 9th Malaysia Plan (9MP), which allocates national budgets for all economic sectors for the 2006-2010 period, to finance selected development projects.
To kickstart the initiative, the Employees Provident Fund (EPF) provided a loan of RM20 billion as seed funding for Pembinaan PFI. Previous news reports place the allocation of the amount to be RM9.5 billion for the education sector, RM1.6 billion for housing, RM878 million for healthcare and RM634 million for transportation.
Companies Commission Malaysia (CCM) records of Pembinaan PFI show that EPF has a charge on the company amounting to RM20 billion. The charge was created on Aug 22, 2007.
For the full story, go to KiniBiz.
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