By P PREM KUMAR / Pic By AFIF ABD HALIM
FINANCE Minister Lim Guan Eng is expected to head a delegation to China to discuss certain discrepancies involving two pipeline construction projects worth RM9.41 billion undertaken by one of the ministry’s subsidiaries.
Prime Minister Tun Dr Mahathir Mohamad told reporters after chairing the weekly Cabinet meeting in Perdana Putra yesterday that Lim’s trip is part of an effort to resolve a quandary posed by the Multi-Product Pipeline (MPP) project from Melaka to Kedah and the Trans-Sabah Gas Pipeline (TSGP) project — both undertaken by Suria Strategic Energy Resources Sdn Bhd (SSER), a wholly owned subsidiary of the Finance Ministry.
On Tuesday, Lim revealed that SSER had already paid its Chinese contractors RM8.3 billion, or 88% of the total project value, even though only 13% of the total work is complete. He said SSER had also contracted out consultancy and maintenance contracts worth another RM1 billion to companies from China.
The MPP and the TSGP were awarded to China Petroleum Pipeline Bureau on Nov 1, 2016, by the previous administration.
Dr Mahathir said the government is also expected to negotiate with the relevant parties before deciding on either terminating or deferring the RM55 billion East Coast Rail Link (ECRL) development — depending on which option is cheaper.
“We want to negotiate to ensure that we don’t have to spend so much money on the ECRL because we cannot afford it. We found that the contract includes payments according to a specific time frame.
“The work done is much less than the payments that have already been made,” he said.
Dr Mahathir also announced the establishment of a special investigative committee to scrutinise administrative affairs, procurements and finance of federal ministries.He said former Auditor- General Tan Sri Ambrin Buang has been appointed to head the newly set-up committee.
“The committee will look into all ministries, but for now, the focus will be on the Defence Mini st ry,” Dr Mahathir said.
On the dispute between Petroliam Nasional Bhd (Petronas) and the Sarawak state government on the rights over energy resources, Dr Mahathir said the government is leaving it to the court to decide.
“Petronas says that it is the rightful owner of all resources as per the law, while the state government also claims the opposite, so it’s best to clarify it in court.
“The matter now is at the Federal Court, so it is up to them to provide clarification.”
Petronas filed a case at the Federal Court this week, seeking a declaration that the Petroleum Development Act 1974 (PDA) is the law applicable for the petroleum industry in Malaysia.
According to Petronas, the PDA stipulates that it is the exclusive owner of the petroleum resources, as well as the regulator for the upstream industry throughout Malaysia, including Sarawak.