Uncertainty ahead for stakeholders as Pakatan Harapan govt seeks to purge bad deals
By MARK RAO & FARA AISYAH / Pic By ISMAIL CHE RUS
The Melaka-Jitra gas pipeline project is likely to be scrapped, while Perbadanan PR1MA Malaysia (PR1MA) may be restructured under the Housing and Local Government Ministry as the new administration swiftly moves to correct deals signed by the previous government.
The Pakatan Harapan government had promised to review mega projects as it seeks to repair the damage to the country’s financials, correct and reverse unbeneficial decisions, and scrutinise lopsided approval processes.
Global research firm Frost & Sullivan expects large-scale energy infrastructure, including gas transfer pipelines and power plant projects, would be reviewed by the new government.
“Two major gas pipeline projects that could be reviewed are the Melaka-Jitra pipeline in Kedah and Sandakan-Kimanis in Sabah,” said
Abhishek Kumar, an associate director for energy and environment, in a report.
The 662km Trans Sabah Gas Pipeline from the Kimanis Gas Terminal to plants in Sandakan and Tawau, and the 600km Multi Products Pipeline from Melaka to Jitra, Kedah, are estimated to cost RM10 billion.
The project is undertaken by Suria Strategic Energy Resources Sdn Bhd, a Ministry of Finance (MoF) Inc’s company.
Kumar said both pipelines are backed by Chinese investments and based on the Pakatan Harapan election manifesto, these projects are subject for review.
“In the power generation sector, independent power producers which were awarded (projects) through direct negotiation without direct competitive bidding could be reviewed,” he said.
Datuk Seri Mohamed Azmin Ali (picture), in his first press conference as the economic affairs minister yesterday, warned that the government would review projects, including mega ones, which were approved under the previous administration.
“We want to revisit all mega projects approved by the previous administration and we will also want to renegotiate the terms, but if the projects have not been carried out, we will only focus on those which will have a direct impact on the people,” Bernama reported Azmin as saying.
He said the projects to be reviewed include the East Coast Rail Link (ECRL) and the Kuala Lumpur-Singapore high-speed rail (HSR).
“We need to look at what happened and we want to make sure that the whole process is transparent and open. Let me sit down with the relevant authorities and agencies before we decide what to do next.
“We must be open and very transparent in procurement processes,” he said, adding that the country’s debt level is a major concern to the new administration.
Another project that could also be reviewed is the US$9.7 billion (RM38.49 billion) Bagan Datoh energy port, together with an oil pipeline up to Bachok, Kelantan.
Affordable housing is also high on the agenda of the new government as many Malaysians, especially in the major cities, abandon any hope of purchasing their own home due to high prices.
The newly sworn in Housing and Local Government Minister Datuk Zuraida Kamaruddin said the ministry is mulling the possibility of synchronising the current public affordable housing schemes, including PR1MA, under one programme.
“Although PR1MA is not under the ministry, however, there is a possibility for us to propose to the Cabinet to synchronise everything together, instead of having two separate programmes which share the same target,” she was reported as saying in Putrajaya yesterday.
Presently, PR1MA is a unit under the Prime Minister’s Department. As of November last year, PR1MA was in the middle of building 141,661 units of homes that were at various stages of construction. It sold 12,640 units at the middle of November 2017.
In July last year, PR1MA raised RM5 billion from the debt market via sukuk programmes guaranteed by the government to finance its projects. It is not known how profitable PR1MA is and its actual liabilities since inception in 2012.
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president Foo Gee Jen said synchronising existing public affordable housing schemes including PR1MA is a brilliant solution and the idea had been mooted by many non-governmental organisations and associations.
“Even Bank Negara Malaysia and Khazanah Nasional Bhd had already mentioned this many years ago. I believe what had been holding back the previous government was always the lack of political will, too much politicking over affordable housing issue.
“Every wakil rakyat tried to win the votes by having affordable homes in their area. Too many affordable homes are allocated based on the strength of the political master, resulting in a mis- match of location and no supporting infrastructure,” Foo said.
A PR1MA spokesperson said the corporation couldn’t comment on the proposal because it is just a suggestion from the housing and local government minister. “There is still no official order yet. So, at this stage we cannot really give a comment.”