SSER yet to secure land rights for RM9.4b pipeline projects

MACC has raided SSER’s offices and all its staff are on ‘garden leave’

By FARA AISYAH / Pic By TMR

The Ministry of Finance (MoF) has taken over the offices of Suria Strategic Energy Resources Sdn Bhd (SSER) and removed its president Datuk Mohammed Azhar Osman Khairuddin as investigations into the owner of two pipeline projects worth RM9.4 billion deepen.

Minister Lim Guan Eng (picture) said the Malaysian Anti-Corruption Commission (MACC) has also raided the offices of SSER and all its staff have been put on “garden leave” even as more discrepancies are uncovered.

Lim said ministry investigators have discovered that the land rights for the pipeline projects have not been secured, despite the company having paid out 88% of the contract price for the Multi-Product Pipeline (MPP) and the Trans Sabah Gas Pipeline (TSGP).

“We have since discovered that SSER has failed to secure any rights from Petronas (Petroliam Nasional Bhd) as required by law to lay the pipes for MPP, and has also failed to acquire the necessary land in Sabah to do the same for TSGP,” he said in a statement.

Lim said the ministry also discovered that the SSER pipeline contracts were connected with another multibillion controversial project — the East Coast Rail Link (ECRL).

He said both projects were presented for approval in the same Cabinet paper by former Minister in the Prime Minister’s Department Datuk Abdul Rahman Dahlan.

Lim said the SSER and ECRL projects are “vastly” different, but financed by the same lender, the Export-Import Bank of China.

SSER contracted out to build a RM5.35 billion 600km pipeline from Melaka and Port Dickson to Kedah, as well as the TSGP from Kimanis Gas Terminal to Sandakan and Tawau for RM4.06 billion.

The pipeline projects are under review following discoveries of lopsided clauses, including payments based on time instead of work done.

SSER has paid out 88% of the RM9.4 billion with the MPP and TSGP recording only 14.5% and 11.4% progress completion respectively as at the end of March 2018, or an ave- rage of 13%, although the completion rates have yet to be verified or audited.

“Despite such shocking revelations, (former Prime Minister) Datuk Seri Mohd Najib Razak still claims that all the necessary processes, procedures and laws had been complied with in relation to the signing of these two pipeline projects,” said Lim.

Najib had issued a statement on June 5, 2018, defending his administration’s award worth RM9.4 billion to the China Petroleum Pipeline Bureau by SSER.

Some of the justifications claimed by Najib included China’s commitment to buy RM2 trillion worth of Malaysian products over five years, invest up to US$150 billion (RM598.53 billion) in Malaysia and offer 10,000 places for training and studies in various institutes in China.

Lim said the MoF has asked Treasury and the chief secretary to the government to verify the Chinese commitments for the project.

“All officials asked have stated that these claims by Najib are untrue,” he added.

Lim said there was no mention of the various “commitments” made by China in any of the Cabinet papers presented in 2016 and 2017, which approved the SSER projects.

“Unless of course there are certain hidden Cabinet papers or ‘red’ Cabinet minutes that no one has access to except the former prime minister himself,” Lim said, alluding to the Treasury’s secret “red files” where details of the SSER and other projects were hidden.

The MoF is now in the process of appointing an executive committee led by an accounting firm to operate the company and investigate the transactions made by SSER.