There is evidence of money laundering in the two fuel pipeline projects suspended by Putrajaya, claimed Damansara MP Tony Pua.

The two projects are the Multi-Product Pipeline (MPP) in Malacca valued at RM5.35 billion, and the RM4.06 billion Trans-Sabah Gas Pipeline (TSGP).

"The entire project smelled like a scam. Clearly, elements of money laundering are taking place.

"We were giving money out – to a Chinese company – and we suspect this money is being funnelled to parties related to the previous administration,” he told the BBC in an interview published today.

Pua, who now on a six-month contract as a special officer to the finance minister, said the ministry believed that the money was used to cover up debts linked to troubled state fund 1MDB.

These debts, he said, amounted to approximately RM48 billion.

On June 5, Finance Minister Lim Guan Eng revealed that his predecessor Najib Abdul Razak had released RM8.25 billion – 87.7 percent of the cost – for the two pipeline projects, despite little actual work being carried out.

Works for both the MPP and the TSGP projects began in April last year.

The projects were undertaken by Suria Strategic Energy Resources (SSER) – a fully-owned subsidiary of the Finance Ministry set up specifically for the pipelines in 2016.

The China Petroleum Pipeline Bureau (CPPB), a subsidiary of China National Petroleum Corporation – the biggest builder of pipelines in the country – had been contracted for the projects.

The China Exim Bank financed 85 percent of the project cost.

After Lim’s announcement, Najib argued that the deal was above board, and that China, in exchange, had promised to import goods worth US$2 trillion from Malaysia over five years, and invest up to US$150 billion in the country.

This was later disputed by Lim.

The finance minister had also established that several personalities involved in SSER were also linked to former 1MDB subsidiary SRC International Sdn Bhd.

Both 1MDB and SRC International are currently the subject of investigations, while Najib faces four criminal charges over RM42 million he allegedly received from the latter.

In a related development, Chinese ambassador Bai Tian said Council of Eminent Persons chairperson Daim Zainuddin left for China today for discussions in connection with the suspended East Coast Rail Line project.

"(I believe) both parties can find a win-win solution," he said, according to Nanyang Siang Pau.

Bai added that Prime Minister Dr Mahathir Mohamad's trip to China is currently being finalised.