Archive for July, 2018

31
Jul
18

1MDB land surreptitiously sold to Cayman Islands firm

1MDB land surreptitiously sold to Cayman Islands firm

This article first appeared in The Edge Financial Daily, on July 30, 2018.

KUALA LUMPUR: Despite a freeze imposed by the Penang state government on transactions involving 1Malaysia Development Bhd’s (1MDB) Air Itam land in Penang, all 234 acres (94.7ha) have been surreptitiously sold to Cayman Islands-based Silk Road Southeast Asia Real Estate Ltd, according to Finance Minister Lim Guan Eng.

Guan Eng said the land was sold for 4.25 billion yuan (RM2.7 billion) on Aug 24, 2017, netting a profit of RM1.32 billion based on the original RM1.38 billion purchase price.

The sale was carried out through the disposal of the land’s owner, 1MDB unit My City Ventures Sdn Bhd, to Silk Road via a share sale agreement, Guan Eng said in a written parliamentary reply.

“Although the full proceeds from the disposal of My City Ventures have been received by Minister of Finance Inc’s wholly-owned subsidiary Sentuhan Budiman Sdn Bhd (SBSB), the transfer of shares to Silk Road has yet to be completed.

“To date, SBSB has yet to receive any application from Silk Road to have the shares transferred,” Guan Eng said in reply to a question on July 19 from Bukit Bendera member of parliament Wong Hon Wai on the status of the land.

A source familiar with the issue said the transaction reeks of money laundering, as the buyer did not subsequently seek the transfer of the shares.

“Why do you throw so much money and don’t ask for the transfer of titles? The obvious answer is money laundering,” the source told The Edge Financial Daily.

It is believed that the money might have travelled from the ministry of finance’s (MoF) wholly-owned unit Suria Strategic Energy Resources Sdn Bhd’s RM9.4 billion gas pipeline project that was awarded to China Petroleum Pipeline Bureau on Nov 1, 2016.

The project is being scrutinised by the federal government along with the East Coast Rail Link built by China Communications Construction Co Ltd, with both companies being issued with stopwork orders on the grounds of national interest, among others.

The money is suspected to have originated from the project’s financing via China Exim Bank before travelling to Silk Road, with an Arab shareholder, and returning to Malaysia where it was transacted in renminbi for the land, and later used to service the US$3.5 billion International Petroleum Investment Co (IPIC) loan.

“The company (Silk Road) did not care about the (Air Itam) land because it was not their money anyway. There is no money trail evidence but it is quite obvious (that it is money laundering),” the source said.

However, the MoF is not able to do anything, the source said, adding that Silk Road did ask for the transfer of the land titles sometime back but there has been no follow-up since.

A company search showed that My City Ventures is a RM2 company set up on March 21, 2013 with RM145,503 paid-up and issued capital. Former 1MDB chief financial officer Azmi Tahir and Chen Kai Hong were named as directors. The company posted a net profit of RM18,478 with zero revenue for the financial year ended March 31, 2017 (FY17). Its total assets dropped to RM137,882 from RM1.07 billion in FY15.

My City Ventures’ subsidiary 1MDB RE (Ayer Itam) Sdn Bhd bought the Air Itam land from Farlim Properties Sdn Bhd and Gerak Indera Sdn Bhd on April 29, 2013, along with another 1.1 acres from Farlim Group Bhd on Sept 23, 2013, for a total of RM1.38 billion.

…more
1MDB land surreptitiously sold to Cayman Islands firm
Sangeetha Amarthalingam
The Edge Financial Daily
July 30, 2018

27
Jul
18

Rothschild bank sanctioned for role in 1MDB scandal

Rothschild bank sanctioned for role in 1MDB scandal

The Swiss financial regulator has concluded its investigations into the Malaysian 1MDB scandal by finding Rothschild Bank AG and one of its subsidiaries in serious breach of anti-money laundering regulations.

The Swiss Financial Market Supervisory Authority (FINMA) said on Friday that it has appointed an auditor to make sure the bank and its Rothschild Trust vehicle properly implement an internal overhaul of its practices.

Rothschild Bank AG is the third Swiss bank to be directly implicated in the 1MDB fraud that saw billions of dollars syphoned off from the sovereign wealth fund into the pockets of corrupt officials.

BSI and Falcon banks have also been subject to FINMA enforcements. In addition, the Swiss Attorney General is conducting criminal probes into those two banks plus six unnamed individuals. The long-running scandal has also seen criminal actions in Malaysia, Singapore and the United States.

Concerning Rothschild, FINMA statedexternal link that the two entities were found to be “in breach of due diligence, reporting and documentation requirements”.

“Although there were early indications that this client could be involved in money laundering activities, the institutions decided nevertheless to enter into the relationship and at a later stage considerably expand it,” the statement read.

The entities also failed to document suspicious transactions or report them in a timely manner, FINMA ruled.

The regulator also said on Friday that it has officially closed its 1MDB related investigations following seven enforcement actions.

…more
Rothschild bank sanctioned for role in 1MDB scandal
July 20, 2018 – swissinfo.ch

26
Jul
18

Poor Nepali migrant workers victims of scam with links to politicians

Kleptocrats of Kathmandu and Kuala Lumpur

Politicians and recruiters in Nepal and Malaysia collude to loot poor Nepali migrant workers

SOFT TARGET: Malaysia-bound migrant workers at a Kathmandu-based GSG facility, where their passports and fingerprints are scanned for Immigration and Security Clearance.

A deeply-rooted nexus of politicians, businessmen and bureaucrats in Nepal and Malaysia have looted more than Rs5 billion over the past five years from vulnerable Nepali migrant workers desperate to seek work in Malaysia.

Nepal’s Labour Minister Gokarna Bista is trying to dismantle those involved in the exploitation by cracking down on several Kathmandu-based companies set up to extort fees from overseas contract workers. In Malaysia itself, the newly-elected Prime Minister Mahathir Mohammad has also launched an investigation into the previous government’s involvement in profiting from migrant workers.

The scam involved powerful Malaysian businesses with close links to ministers and officials in the Barisan Nasional coalition of former Prime Minister Najib Razak and implemented by their agents in Kathmandu who had contacts with influential politicians and bureaucrats in Nepal.

It all started five years ago when Malaysia’s Home Minister Ahmad Zahid Hamidi outsourced a private company (Ultra Kirana Sdn Bhd) which required Nepali migrant workers to apply for work visas through a Kathmandu-based affiliate, Malaysia VLN Nepal. The agency charged Rs3,200 from every Malaysia-bound Nepali worker, and collected Rs 1.95 billion from more than 600,000 workers between September 2013 and April 2018.

Then in July 2015, Malaysia made it mandatory for all Nepali migrants to undergo a biometric test. The Malaysian government hired Bestinet Sdn Bhd, a tech firm run by Malaysian Home Minister Hamidi’s brother-in-law Amin Bin Abdul Nor, for biometric health screening. Minister Hamidi’s brother Abdul Hakim Hamidi and ex-Malaysian Environment Minister Ajmi Khalid also reportedly owned shares in Bestinet.

Bestinet partnered with Nepal Health Professional Federation (NHPF) to carry out biometric screening through 39 medical centres which charged Rs4,500 from each migrant worker for biometrics. Bestinet and NHPF have already collected over Rs1 billion from over 200,000 Nepali workers.

Previously, migrant workers could have applied for visas independently or through any manpower agency . They could get a visa for just Rs700. They could get medical tests from any of 200 government-approved health facilities. But after Malaysia required private companies for visa processing and biometric screening, workers were forced to pay much more.

The real scam involved the lack of transparency in Malaysia and in Nepal on the choice of the private companies hired to facilitate this process, which ended up fleecing workers.

While in Malaysia the companies were partly-owned by relatives of politicians, in Nepal bureaucrats and politicians benefited from kickbacks for sanctioning the new system. Fees were added on arbitrarily, and all involved in the syndicate in the two countries divided up the profits.

For example, the Rs3,200 visa processing fee did not cover all visa-related costs of a migrant worker. In May 2016, Malaysia hired another private company, One Stop Centre (OSC) to collect visa forms and passports and drop them at its embassy in Kathmandu. The OSC chose the same Malaysia VLN Nepal for this job, which added an extra fee of Rs2,800 from each applicant.

Bestinet has also been allowed to charge each migrant worker Rs3,200 just for scanning passports, fingerprinting and an additional Rs3,500 to upload the data online. Bestinet’s Kathmandu-based agent, GSG Nepal, scans passports and fingerprints for all Malaysia-bound migrant workers. Bestinet in turn collaborated with labour recruitment agencies in Kathmandu and has so far collected over Rs1.3 billion in fees for passport and fingerprints scanning, and online data entry.

Tallied together, the Malaysia government and companies backed by powerful Malay politicians have, in total, taken more than Rs5 billion (US$ 450 million) from over 600,000 Nepali workers between September 2013 and April 2018. Nepali politicians, bureaucrats and businesses were directly colluding with their Malaysian counterparts in cheating the workers. There are over 600,000 Nepali workers in Malaysia, and their remittances help sustain Nepal’s economy.

The arrangements have been put into place on an ad hoc basis, without transparency and in the absence of any bilateral agreements between the governments of Nepal and Malaysia. Some of the companies managing migration in Nepal do not even have government approval.

Nepal’s Labour Ministry was initially reluctant to accept Malaysia’s proposal to introduce biometric systems, arguing it would allow certain medical centres to overcharge migrant workers. But those lobbying for biometrics were so powerful that the ministry had to approve the system as a ‘pilot project’ for six months.

But long after the six months were over, Bestinet and the NHPF continued with biometric system with no interference from the government.

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Kleptocrats of Kathmandu and Kuala Lumpur
Ramu Sapkota in Kathmandu with Alyaa Alhadjri in Kuala Lumpur
July 20, 2018 – Nepali Times

25
Jul
18

Inviting foreign govt interference is a serious betrayal of trust

The CIA letter and the treason option

Whichever way you look at it, inviting a foreign government to side with Najib in the event of an electoral impasse is a serious betrayal of trust.

COMMENT
By Dennis Ignatius

Recent calls by the Patriots Association and others to thoroughly investigate a letter allegedly written by Hasanah Ab Hamid, the former Director-General of the Research Department (also known as ME10), to the Chief of the US Central Intelligence Agency (CIA) deserves to be taken seriously.

In a long, rambling and convoluted letter dated 4th May, Hasanah appeared to be soliciting CIA support for the Najib Administration in the event of a disputed electoral outcome.

The letter, believed to have been leaked by someone inside the current administration, could amount to an act of treason on the part of a senior government official and calls into question former Prime Minister Najib Razak’s oft-repeated claims that he had always intended to respect the outcome of the elections.

Seeking US endorsement

In her letter, Hasanah:

  • reminded the US that Malaysia practises a first-past-the-post electoral system rather than proportional representation
  • hinted at a possible opposition victory (“the opposition’s hopes to wrest control of the government seems a bit promising as Mahathir joined them”)
  • warned that a Mahathir victory could be disastrous for US interests in the region
  • emphasized that Najib, on the other hand, remains a reliable friend and ally of the US and is fully supportive of key US foreign policy objectives (North Korea, terrorism, South China Sea). Hasanah even hinted that if US endorsement for Najib was forthcoming, Malaysia would also quietly favour the US in its regional rivalry with China.

Hasanah then went on to solicit US endorsement for the Najib Administration in the event of a less than clear outcome (“even if we are to win the election by a simple majority of just one seat”) suggesting that an indication of US support could help “strengthen our stability.”

Exploring all options

What this indicates is that in the final days of the election campaign, Najib and his team had already concluded that the tide had turned against them and were exploring all their options.

The most likely scenario they were preparing for was one in which Najib massively lost the popular vote but managed to obtain a simple majority in parliament (perhaps of “just one seat,” as Hasanah mentioned in her letter). This was the same kind of scenario that many observers at the time had thought likely especially given all gerrymandering that had taken place just prior to elections being called.

What Najib’s team worried about, however, was that a failure to carry the popular vote by a credible margin might lead Mahathir and his coalition to challenge Najib’s legitimacy. In such a situation, US endorsement for Najib, and for any actions he might take to “stabilise” the situation (via the National Security Council Act, for example), could strengthen his hand.

By all counts it was a stunning climb down for a man who had previously fumed about US interference and claimed to be a great defender of race, religion and country.

That he would now go hat in hand to Washington, through the CIA no less, was a measure of the man’s mounting desperation in the early days of May.

An invitation to interference

Whichever way you look at it, inviting a foreign government to side with him in the event of an electoral impasse is a serious betrayal of trust. Though Najib has denied all knowledge of the letter, it does not seem plausible that Hasanah, who was close to Najib, would have acted on her own.

It is mind-boggling too that Najib’s officials would even believe that such a pathetic, self-serving letter could sway the US government which was already investigating Najib in connection with the 1MDB scandal. Besides, the US embassy in Kuala Lumpur and the CIA station chief would have surely been providing their own assessments to Washington sans the Umno-type propaganda contained in the letter.

…more
The CIA letter and the treason option
July 22, 2018 – FMT

23
Jul
18

Malaysia Expects to Recover Up to $3.5 Billion of 1MDB Funds – Bloomberg

Malaysia Expects to Recover Up to $3.5 Billion of 1MDB Funds

  • Finance Minister Lim expects to recover 10%-30% of lost monies
  • Mahathir is seeking to recover $4.5 billion of 1MDB funds

Malaysia expects to recover as much as $3.5 billion of funds potentially lost through 1MDB, said Finance Minister Lim Guan Eng.

The government may be able to regain at least 10 percent of the 50 billion ringgit ($12.3 billion) of funds that Lim estimated were siphoned from the troubled state fund, and up to 30 percent of the amount, “if we are lucky,” he said in an interview. Prime Minister Mahathir Mohamad previously said he’s seeking to recoup $4.5 billion.

Lim’s admission puts into perspective the difficulty in tracing the numerous complex transactions spanning the globe that Swiss Attorney-General Michael Lauber called a “Ponzi scheme.” The scandal surrounding the fund, which was set up under former premier Najib Razak to attract investment into Malaysia, has spawned worldwide investigations in at least 10 countries, including Singapore and the U.S.

“We couldn’t locate, we couldn’t trace where the money went and what they purchased,” Lim, 57, said to Bloomberg Television’s Haslinda Amin in Putrajaya. “Those that we can trace, there’s also the question of ownership, due process as well as different national jurisdiction.”

Malaysia hired Singapore-based law firm Tan Rajah & Cheah to help it recover the funds, while Swiss prosecutors pledged to return any stolen money to the nation. The U.S. Justice Department is seeking to seize about $1.7 billion in assets it says were illegally acquired through money diverted from 1MDB, including super yacht “Equanimity” seized by Indonesian police in July.
Billion-Dollar Scandals

The domestic probe into the fund, whose full name is 1Malaysia Development Bhd., has led to Najib being charged with several counts of criminal breach of trust and corruption. He has pleaded not guilty. The Malaysian Anti-Corruption Commission has issued arrest warrants for former 1MDB executives Jasmine Loo Ai Swan and Casey Tang Keng Chee, as well as financier Low Taek Jho, who was described by U.S. investigators as a central figure in the scandal.

…more
Malaysia Expects to Recover Up to $3.5 Billion of 1MDB Funds
By Anisah Shukry
and Pooi Koon Chong
July 19, 2018 – Bloomberg

22
Jul
18

Ex-servicemen want probe into ‘treasonous’ CIA letter

Ex-servicemen want probe into ‘treasonous’ CIA letter

The National Patriots Association says the purported letter discussed internal security matters and foreign policy matters that should not have been shared.

PETALING JAYA: The National Patriots Association (Patriot) has called on the authorities to investigate a letter allegedly sent by the top intelligence officer under the Najib Razak administration to the Central Intelligence Agency (CIA) just before the May 9 polls, calling it “treacherous” and “treasonous”.

Patriot president Brig-Gen (Rtd) Mohamed Arshad Raji said the purported letter had discussed internal security matters and foreign policy matters that should not have been shared.

It also asked the US to support the previous Barisan Nasional government in case the election result turned out to be close, he said.

“It appears that the Najib Razak government pandered to both sides of the two superpowers conflict. On one hand, we gave tacit support for China’s dominance in the South China Sea, and on the other covertly informed that our country was pro-US and supported the US’ presence in the region.”

He also condemned its reported criticism of Prime Minister Dr Mahathir Mohamad as “anti-West” and “anti-Semite”, saying this was “despicable, shameful and tramples the art of foreign relation to a guttering level”.

“Only a leader and a government lacking all good qualities of leadership and good governance would stoop so low,” he said in a statement.

FMT earlier published what is said to be a copy of the letter to CIA director Gina Haspel, written on behalf of the “Malaysian External Intelligence Organization (MEIO)” and signed by Hasanah Ab Hamid, who also leads a unit under the Research Division of the Prime Minister’s Department.

However, Najib has denied that such a letter exists.

Arshad called for an immediate investigation into the unit and all officials concerned.

“All guilty persons should be seriously punished to set an example to all current officials in the government, security forces personnel, and politicians, that such collusion with any foreign officials or government is considered treason.”

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Ex-servicemen want probe into ‘treasonous’ CIA letter
July 20, 2018 – FMT

20
Jul
18

MACC issues arrest warrants for ex-1MDB executives

MACC issues arrest warrants for ex-1MDB executives

KUALA LUMPUR, July 19 — Malaysian investigators are said to have issued arrest warrants for two former executives of troubled state fund 1MDB, according to a person with knowledge of the matter.

The Malaysian Anti-Corruption Commission is seeking 1MDB’s ex-general counsel Jasmine Loo Ai Swan and former executive director Casey Tang Keng Chee, according to a person familiar with the matter who asked not to be identified as the matter is private.

The country’s renewed investigation into missing funds at 1MDB recently resulted in former prime minister Datuk Seri Najib Razak being charged with several counts of criminal breach of trust and corruption, as police said they seized more than RM1.1 billion of cash and items linked to the case. Najib has pleaded not guilty. The local investigation is nearly complete, Chief Commissioner Mohd Shukri Abdull said on July 7, adding that the inquiry now hinges on the MACC gathering evidence from overseas.

Loo and Tang haven’t been charged with any wrongdoing, and it isn’t clear what suspicions underpin the warrants. Attempts to reach their representatives weren’t successful. A representative for the MACC declined to comment.

Singapore assets

Malaysia is as focused on rooting out corruption as it is on recouping funds potentially lost through 1MDB, with Prime Minister Tun Mahathir Mohamad setting the goal at US$4.5 billion (RM18.3 billion).

The government has hired Singapore-based Tan Rajah & Cheah to help it recover 1MDB funds, said Imran Khwaja, a partner at the law firm. Singapore’s Attorney-General’s Chambers confirmed that it has been in contact with the firm on seized assets linked to 1MDB, and that the funds will be treated according to the law, according to a representative at the chambers.

Former 1MDB executives Loo and Tang were summoned by the commission in June to help with the case on the fund’s former unit SRC International Sdn, along with two other ex-1MDB officials Geh Choh Heng and Eric Tan Kim Loong. Singapore has sought assistance from Interpol to locate Tan since 2016, along with financier Low Taek Jho who has been painted by US investigators as a central figure in the multibillion-dollar scandal.

1MDB officer 3

Loo, a Malaysian who studied law in the UK, was said to have been dubbed “1MDB Officer 3” by the US government, according to people familiar with the matter. The US also said the officer was 1MDB’s liaison to Goldman Sachs Group Inc., the bank that helped the state fund raise $6.5 billion, and that she received a US$5 million transfer among dozens of payments in a scheme that ultimately drained billions of dollars from the fund.

Tang was involved with 1MDB, whose full name is 1Malaysia Development Bhd., from when it was still known as Terengganu Investment Authority, until 2011. It isn’t clear when Loo left the fund.

Bank Negara Malaysia summoned both of them for questioning in 2015, but they never appeared. By March 2017, Najib said they were no longer on the central bank’s radar as the previous domestic investigation had been concluded. — Bloomberg

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MACC issues arrest warrants for ex-1MDB executives
19 July 2018 – MMO

19
Jul
18

RM470 million made its way from Najib’s accounts to BN parties

Portal details which BN parties got a piece of Najib’s RM470m

KUALA LUMPUR, July 18 — About RM470 million made its way from one of former prime minister Datuk Seri Najib Razak’s bank accounts to Barisan Nasional (BN) parties between April 2012 and August 2013, a news portal asserted today.

Based on information it compiled, news portal Malaysiakini said a minimum of RM470 million was funnelled to nine parties of the then 13-member BN, one BN-friendly party, and the coalition itself.

The party that benefited the most is BN’s mainstay party Umno, which purportedly took RM417.414 million or 88 per cent of the funds.

Umno’s allies MIC and MCA allegedly received the second and third largest sum from this account at RM20.55 million (0.44 per cent) and RM16.5 million (0.35 per cent) respectively.

BN is now reduced to these three political parties following its defeat at the 14th general elections, but its former partners in Sabah and Sarawak were alleged to have benefited previously from the funds from Najib’s bank account.

According to Malaysiakini’s compilation, the Sarawak United Peoples’ Party (SUPP) allegedly received RM3.5 million and Sabah’s Liberal Democratic Party (LDP) also purportedly received RM3.5 million.

Sabah’s Upko and United Sabah People’s Party (PBRS) allegedly received RM2 million and RM1 million respectively, while PPP and Gerakan were said to have received RM700,000 and RM300,000 respectively.

The Indian Progressive Front (IPF) which previously sought to join BN, allegedly received RM1 million, Malaysiakini’s compiled information showed.

A separate sum of RM3.55 million was said to have been received by BN from this account under Najib, the information on a microsite by Malaysiakini showed.

The information showed that the largest transactions were to Umno at the national level on April 11, 2013 (RM100 million) and April 22, 2013 (RM50 million), just shortly before the 13th general elections (GE13) on May 5, 2013.

Other notable infusions to party funds near GE13 were shown to be to Pahang Umno via two tranches of RM15 million each dated April 18 and April 26, Perak Umno and Johor Umno’s RM25 million each on April 29 and April 30 respectively, as well as RM20 million to Selangor Umno on April 24, the information showed.

The information on other transactions near GE13 showed MIC at the national level receiving RM10 million and RM5 million on April 18 and April 26, while Selangor MCA allegedly received RM5 million each on April 8 and April 30, Penang Umno RM5 million on April 19, Kedah Umno and Kelantan Umno RM5 million each on April 8 and April 10 respectively.

…more
Portal details which BN parties got a piece of Najib’s RM470m
By Ida Lim
18 July 2018 – MMO

17
Jul
18

1MDB – The ‘great-grandmother of all scandals’ comes to China

The ‘great-grandmother of all scandals’ comes to China

There is a new twist in the multi-billion-dollar financial scandal surrounding the Malaysian investment fund 1MDB – possible Chinese involvement.

Malaysia’s new government – which took office only in May – has suspended three major construction projects with Chinese firms.

A senior ministry official told the BBC that it believes that two of the contracts, for pipelines, were used to launder money for Malaysia’s previous administration, led by the former Prime Minister, Najib Razak.

These allegations open a new front in the inquiries into 1MDB, which is already being investigated in the US, Switzerland and Singapore.

The finance ministry’s accusations also represent a sharp change in mood in Malaysia towards China since Mr Najib lost power.

The investigations into 1MDB are being led by Malaysia’s finance ministry, housed in a vast curved building in Putrajaya, a purpose-built town to the south of Kuala Lumpur that has been the country’s administrative capital for the past two decades.

Until the election in May, Tony Pua was an opposition MP who spent much of his time talking about 1MDB, which he calls “the great grandmother of all scandals”.

He made a series of scurrilous videos about the fund and its alleged connection to Mr Najib.
Image copyright Getty Images
Image caption The 1 Malaysia Development Berhad development company is being investigated in Malaysia, Singapore, Switzerland and the US

But now Mr Pua’s party is in government and he has been employed as a special officer to the finance minister to look through the mountains of documentation related to 1MDB.

Before his current job, he said he worked with “dribs and drabs” of information about 1MDB – but not any more. “Now, anything you ask for, the tap opens like a beer barrel,” he told the BBC in an interview at the ministry.

Mr Pua said the new administration had been astounded by what it had found, which has extended the scope of what was previously known about 1MDB, including links to Chinese firms.

Earlier this month (6 July), the ministry announced that it had suspended three big contracts with Chinese companies.

Two of those are pipeline schemes worth a combined total of $2.3bn (£1.7bn).

The ministry’s new leaders were staggered to discover that 88% of the contract cost had been paid to the Chinese company in charge, China Petroleum Pipeline Bureau – but only 13% of the work had been completed.

Mr Pua said building work had not even started; only consultancy studies had so far been completed.

“The entire project smelt like a scam. [There were] clearly elements of money laundering taking place,” he said.

“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 said the ministry believes the money was being used to cover debts linked to 1MDB, which he said now stand at more than $12bn.

…more
The ‘great-grandmother of all scandals’ comes to China
By Michael Bristow
17 July 2018 – BBC

16
Jul
18

LRT3 project ‘needlessly oversized’, cost RM9 billion ballooned to RM31.65 billion

Source: Prasarana ‘needlessly oversized’ LRT3 project

The cost of the LRT3 project had ballooned from RM9 billion in 2015 to the recent figure of RM31.65 billion because Prasarana had needlessly expanded the scope of the project in the intervening years, a source in the Ministry of Finance claimed.

“Along the way, the requirements and specifications were oversized, over-designed and unnecessarily accelerated.

“Examples include benchmarking the LRT stations to MRT size, luxury finishing, iconic designs, tripling train capacity compared to feasibility studies, and building tunnels and underground stations at low-ridership locations.

“As a result, the cost of construction, before adding all other costs, already increased from the announced RM9 billion to RM15.8 billion that was awarded in January this year,” said the source who has knowledge on the matter, but declined to be named.

After initially expressing reservation at the high costs of the LRT3 project, Finance Minister Lim Guan Eng (picture, below) had on Thursday announced that the project will continue, but its cost had been slashed by RM15.02 billion – 47 percent – from RM31.65 billion to RM16.63 billion.

“This cost will include all project costs, including but not limited to Work Package Contracts (WPC), land acquisition, project management, consultancy fees, operational and overhead costs, as well as interests during construction,” he said.

He had added that the RM15 billion savings also resulted in additional savings to taxpayers of up to RM14 billion in interest costs over the period of the loan financing.

The LRT3 project is a 37-kilometre light rail transit line spanning from Johan Jaya in Klang to Bandar Utama in Petaling Jaya. It is purported to have the capacity of 36,700 passenger per hour each way.

The then prime minister Najib Abdul Razak had said in 2015 that the project would cost RM9 billion to construct, whereas land acquisition would cost another RM1 billion.

However, the present government’s cost-cutting measures entailed reducing the number and size of trains being ordered, reducing the size of the train depot, reducing the size of the train stations from the MRT standard to those of the Kelana Jaya line LRT, and deferring the construction of five LRT stations.

It also cancelled a two-kilometre tunnel and underground station in Shah Alam, and extended the completion time of the project from 2020 to 2024 to reduce construction costs inflated by “acceleration costs”.

…more
Source: Prasarana ‘needlessly oversized’ LRT3 project
Lu Wei Hoong
14 July 2018 – Malaysiakini





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How the 1MDB Scandal Spread Across the World (WSJ)
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All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?

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