Declassified report reveals federal meddling in land swap deals

EC also confirms that several camps were built for a political purpose and not for  military strategy

By ALIFAH ZAINUDDIN / Graphic By TMR

DIRECT orders from federal ministers, contract rewards to incompetent companies and relocation of thousands of army personnel are among the revelations of a declassified report on the controversial 16 land swap deals involving the Ministry of Defence (Mindef).

Defence Minister Mohamad Sabu yesterday revealed unflattering details of the land swap deals which had cost the ministry over half a billion ringgit in losses and leakages.

Mohamad said the prime minister and defence ministers under the previous administration had meddled in 13 of the 16 land swap deals investigated which included plots in Bagan Datuk, Perak, and Batu Pahat, Johor.

A source confirmed with The Malaysian Reserve that the ministers involved were Datuk Seri Mohd Najib Razak, Datuk Seri Dr Ahmad Zahid Hamidi and Datuk Seri Hishammuddin Hussein.

Ahmad Zahid served as defence minister from 2009 to 2013 and is MP for Bagan Datuk. Hishammuddin, who is Sembrong MP, succeeded Ahmad Zahid and held the role until the change in go- vernment last year.

The report, prepared by the governance, procurement and finance committee led by former Auditor-General Tan Sri Ambrin Buang, showed a note by the political secretary of a defence minister who demanded that priority be given to the construction of the military camp in Paloh, Johor.

This, according to the note, was to serve the political interests of the constituency in Sembrong.

Subsequently, a demand letter was issued to the company that purchased the land to begin construction without prior signing of any contract. The report, however, concealed the names of the private companies involved in the land swap deals.

The Election Commission (EC) has also confirmed that several camps, including those in Bera, Segamat, Paloh and Hutan Melintang, were built for a political purpose and not for military strategy.

The ministry filed a report with anti-graft authorities earlier in February on two of the 16 land swap deals. The Malaysian Anti-Corruption Commission (MACC) has initiated investigations into the matter.

Mohamad said several Mindef officials have been called in to give their testimony. He added that the ministry will look into the remaining deals before deciding to make any further reports with the MACC.

In his speech in the Dewan Negara yesterday, Mohamad said land swap practices were not something new and have been carried out by Mindef since 1997. A land swap is considered among the best options to meet inadequate development provisions to upgrade and develop military facilities.

However, investigations into these activities found that 16 deals involving 2,923 acres (1,182.9ha) of land valued at RM4.88 billion owned by the ministry had failed to meet government standard operating procedures.

The minister said contracts were directly awarded, while no comprehensive due diligence was done on the companies involved — especially on their technical and financial capabilities. This resulted in the failure and delays of most of the projects.

The deals were also made without taking the considerations of federal agencies such as the Attorney General’s Chambers and Finance Ministry in hand.

“The Cabinet, as a result, made decisions based on limited or false information,” Mohamad said.

Over RM500 million has been lost from these discrepancies, Mohamad said. This does not include a RM1.48 billion lawsuit for a failed project in Pulai, Johor.

The government is now looking to review the deals and has submitted an application to re-evaluate the values of all swapped pieces of land involved in the privatisation project to ensure that the land rates are in line with the principle of value for money.

Mohamad said out of the 16 land swap projects, five have been completed, one has failed, two are under construction, one is in the condition precedent period, three are unsigned and four have received principle approval from the previous Cabinet.