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16
Aug
17

US$1.367 billion was allegedly diverted from US$3.5 billion 1MDB Energy bonds

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11 Aug 2017 – KiniGuide

15
Aug
17

RM4 billion (US$1.03 billion) allegedly diverted from 1MDB RM5 billion Islamic bond

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11 Aug 2017 – KiniGuide

13
Aug
17

Did the money 1MDB used to pay IPIC come from MOF?

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August 12, 2017 – theedgemarkets.com

12
Aug
17

ECRL folly bound to fail and burden the nation

ECRL folly bound to fail and burden the nation

COMMENT | The East Coast Rail Line (ECRL) is being touted to Malaysians as a world-class “game changer” which will accelerate development in the East Coast states of Peninsular Malaysia. Unfortunately, there is little evidence that it will do so, and the rationale for such claims are dubious, to say the least.

We have been told that RM55 billion is being invested in ECRL, which will be completed by 2024. All over the world, such mega-projects are notorious for cost overruns, and there is no reason to believe that this project will be the exception to the rule.

The justification for the ECRL is that it will carry almost 60 million tonnes of freight yearly by 2035. This is incredible because even KTM only carries about 6 million tonnes per annum with its current nationwide network. If the projected massive surge in freight tonnage does not materialise, the project will lose even more, meaning that taxpayers for generations to come will have to massively subsidise the ECRL.

ECRL is supposed to greatly benefit the country in so many incredible ways as to defy simple logic. But will there be enough passenger traffic to support a high-speed rail link? What kind of cargo needs such a costly high-speed haulage connection. And which high-speed railway in the world stimulates so many businesses and jobs in all the towns it will pass through, as claimed.

Will the ECRL be an expensive ‘white elephant’ paid for by Malaysians for many years to come? The Kemaman-Kuantan rail link, completed several years ago, has hardly been used to date. Are we supposed to be thankful that it cost much less than the ECRL?

Even Wan Saiful Wan Jan, the libertarian chief executive of the Institute for Democracy and Economic Affairs (IDEAS) who endorsed the Forest City project in Johor Baru, found the ECRL claims difficult to swallow in a recent article arguing for improved governance generally, especially to manage investments from China.

Honest critics are already being accused of wanting to deprive the East Coast states of development. But those with longer memories know how much Kelantan has been deprived of federal funds by Putrajaya, while Terengganu has been denied petroleum revenues and its investment fund was ‘hijacked’ to become the now notorious 1MDB.

China firms to profit

Of course, the deal will be good for some Chinese state-owned enterprises. The contract was given to the China Communication Construction Company (CCCC) after direct negotiations, without any open tender, although Malaysian companies have delivered on rail projects before. CCCC will be required to subcontract to local firms, but will remain the main contractor.

As we should have learnt from earlier arrangements, foreign firms find ways and means to bring their preferred partners in with them, using local partners to fulfil such requirements as meaningful technology transfer. The international success of Ingress (e.g., in Rayong, the ‘Detroit of Thailand’) contrasts sharply with the minimal development of Malaysian technological capacity and capabilities by many other Proton vendors due to their (mainly Japanese) principals’ practices.

The ECRL will be funded by a loan from China’s state-owned Exim Bank, with the Malaysian government, i.e., taxpayers, serving as guarantor. Thus, the risk and liability will be completely borne by Malaysia.

So, Malaysia will essentially be borrowing money from a China bank to pay a China company to build ECRL. Very little of the loan will get to Malaysia as the Exim Bank loan will be used to pay CCCC. Malaysians will bear all the risks for ECRL while the China firms are guaranteed profits by Malaysians.

Whether or not the ECRL is profitable, we will still have to repay the loan with interest. Malaysia does not have to pay during the first seven years, but after that, we have to settle it within two decades. So financially, this is essentially a loan for which we Malaysians will exclusively bear all the risks.

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ECRL folly bound to fail and burden the nation
Jomo KS
11 Aug 2017 – malaysiakini

11
Aug
17

Stolen 1MDB Funds Are Focus of U.S. Criminal Investigation – Bloomberg

Stolen 1MDB Funds Are Focus of U.S. Criminal Investigation

  • Justice Department asks judge to put forfeiture cases on hold
  • Billions of dollars were allegedly looted from Malaysian fund

The U.S. is moving forward with a criminal investigation into money stolen from a Malaysian state investment fund that allegedly was used to acquire about $1.7 billion in real estate, art, jewelry and other assets.

Court filings by the Justice Department Thursday show the U.S. is escalating its probe in a worldwide effort to track how much of the money that was raised by 1Malaysia Development Bhd. was used to pay for luxury real estate in New York, London and Beverly Hills, AS film productions, private jets, yachts and more.

Justice Department officials asked a judge in Los Angeles to put on hold civil forfeiture lawsuits against assets acquired by Malaysian financier Low Taek Jho, also known as Jho Low, and others involved with 1MDB because pursuing these cases may hamper the criminal investigation.

An FBI agent warned in a court filing that information disclosed in the civil cases may reveal “potential targets and subjects of the investigation and the investigative techniques that have been and will be used in the investigation.”

“Such disclosures could result in the destruction of evidence, flight of potential subjects and targets, or the identification and intimidation of potential witnesses,” according to the agent’s declaration.

Thom Mrozek, a spokesman for the U.S. attorney in Los Angeles, had no immediate comment on the Justice Department’s filings.

In its civil cases, the U.S. has alleged that from 2009 through 2015, more than $4.5 billion belonging to 1MDB was diverted by high-level officials of the fund and their associates.

The Low assets the U.S. is trying to seize include a stake in New York’s Park Lane Hotel, a $107 million interest in EMI Music Publishing, a $35 million Bombardier Jet and a $30 million penthouse at Time Warner Center in New York.

In a second round of 1MDB-related forfeiture lawsuits filed in June, the Justice Department alleged that a $1.29 million heart-shaped diamond and a $3.8 million diamond pendant Low gave in 2014 to his then-girlfriend, actress Miranda Kerr, were bought with stolen money.

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Stolen 1MDB Funds Are Focus of U.S. Criminal Investigation
By Edvard Pettersson
August 10, 2017 – Bloomberg

10
Aug
17

Don’t try to fool Malaysians, public funds used to settle 1MDB debts

Johari should not bluff that government has not given 1MDB public funds to settle debts, says DAP’s Pua

Media Statement by Tony Pua, DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara in Kuala Lumpur on Wednesday, 9 August 2017:

Second Finance Minister, Dato’ Seri Johari Abdul Ghani should not bluff Malaysians by stating that the Government “has never given public funds to 1MDB to settle its debts”

According to Bernama yesterday, Second Finance Minister, Dato’ Seri Johari Abdul Ghani said that “the Finance Ministry (MoF) has never given any public funds to 1Malaysia Development Bhd (1MDB) to help settle its debt”.

The Minister must think that Malaysians are complete and utter idiots to be served what is one of biggest piece of cow dung amongst all the attempts to cover up the 1MDB scandal.

The Ministry of Finance has on so many occasions come to the rescue of 1MDB over the past 2 years involving billions of ringgit of tax-payers’ monies, and yet Dato’ Seri Johari has the cheek to tell us that the MoF “has never given any public funds to 1MDB”.

Among the most clear-cut examples are the RM800 million loan from SOCSO and another RM2.4 billion Bandar Malaysia sukuk bond which the MoF have assumed as a result of taking over TRX City Sdn Bhd and Bandar Malaysia Sdn Bhd.

The Auditor-General has reported that nearly all of the above proceeds of the 1MDB borrowings were never used for the development of the 2 property projects above. Hence when MoF agreed to take over the property projects and assumed the liabilities, MoF has effectively “settled” 1MDB’s RM3.2 billion debt problem.

What’s more, when 1MDB had originally sold a 60% stake in Bandar Malaysia to an Iskandar Waterfront Holdings (IWH) Sdn Bhd-led consortium, they had collected, and presumably spent the RM741 million deposit which has been paid upon the signing of the sale and purchase agreement in December 2015.

However, when MoF terminated the sale due to IWH payment defaults, it was MoF who coughed up the RM741 million to refund the deposit paid by the consortium. If the deposit, should have been refunded at all, it should have been by 1MDB, and not by the Malaysian tax-payers.

The above doesn’t yet include MoF subsidiary or subsidiaries which actually acquired properties from 1MDB in TRX at inflated prices. The irony is, it was MoF who sold the land to 1MDB in the first place at dirt cheap prices.

We understand the conundrum Dato’ Seri Johari Abdul Ghani is facing as the 2nd Finance Minister who has fallen out of favour and having to defend the indefensible regain the Prime Minister’s favour. It is now clear that he has been dropped by Dato’ Seri Najib Razak from handling the 1MDB imbroglio, particularly in the company’s multi-billion dollar dispute with Abu Dhabi’s IPIC.

However, the Second Finance Minister should not go to the extent to telling outright lies to pull the wool over the people’s eyes. Dato’ Seri Johari should not forget his role and responsibility to the people of Malaysia by sacrificing his own integrity and honour.

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Johari should not bluff that government has not given 1MDB public funds to settle debts, says DAP’s Pua
August 09, 2017 – theedgemarkets.com

09
Aug
17

10 reasons why we don’t need RM55 BILLION ECRL

10 reasons why we don’t need RM55b east coast rail link

A QUESTION OF BUSINESS | Why does the country need a double-tracked, electrified East Coast Rail Line (ECRL) from Port Klang on the west coast of Peninsular Malaysia to Kuantan and Tumpat on the east coast – 688 kilometres, to be built at a massive cost of RM55 billion?

Especially since the earlier double-tracking project from Padang Besar, Perlis to Johor Bharu costing a massive RM36 billion is already one of the greatest, if not the greatest, infrastructure failures in Malaysia ever?

Proceeding with such a dubious project raises many questions over the competency and integrity of the government which awarded this project without a tender process to the China Communications Construction Company (CCCC), a China state-owned company which was barred from World Bank projects in 2009 because of alleged fraudulent practices in other countries.

Also, by now, China’s efforts to further its own interests under the One Belt One Road (OBOR) project is now well-known. Many, including this writer, consider it to be a thinly disguised plan using Chinese and other concessional financings which will strengthen China’s role in international trade, industry and connectivity, often at the expense of other countries.

China’s vision for the ECRL seems to be for the link to provide connectivity via rail between Port Klang and Kuantan for cargo to be moved back and forth which will save transport costs for goods headed to and out of China. But at RM55 billion, the number of goods moved has to be astronomical for it to be economically feasible.

Here are 10 reasons why that ECRL project should absolutely not proceed.

1. Economically not feasible. At RM55 billion, it’s the largest infrastructure project ever for Malaysia. If we assume a required 10 percent rate of return on the investment, the ECRL has to generate an income, not revenue, of RM5.5 billion a year. Assuming income is even 20 percent of revenue, then revenue needs to be a massive RM27.5 billion! The impossible task ahead is illustrated by this: In 2016, Singapore’s port had a turnover of S$3.7 billion (RM11.7 billion) and a profit of S$1.2 billion.

2. Earlier RM36 billion double-tracking has failed spectacularly. Let’s look at the utter failure of the RM36 billion double-tracking venture initiated under the Mahathir regime. Rail operator KTM had a revenue of RM1.1 billion in 2016 from which it obtained a cash flow of a mere RM166 million. Revenue is only 3 percent of the cost of double-tracking while operating cash flow is a mere 0.5 percent, not anywhere near enough to cover even interest expenses. For a 10 percent return on costs, cash flow needs to rise over 20 times to RM3.6 billion a year. This is the backbone north-south route of Peninsular Malaysia. How is the ECRL going to fare any better?

3. Expensive. Not only is the ECRL extremely expensive in absolute terms, it is also very expensive in terms of cost per km at RM80 million compared to the Gemas-Johor Bharu double-tracking stretch of RM45 million per km. However, this is not strictly comparable given that the ECRL goes over hilly terrain. But analysis is seriously hampered by the lack of information.

4. Unnecessary. Such a large investment can only be justified if there is a great economic benefit. Economically it will depend on one major customer – China – which is looking to export and import goods more cheaply by ferrying goods between Kuala Lumpur and Kuantan via a rail to cut shipping costs.

5. Does not serve the country’s purpose. Such a move does not serve the country’s purpose but instead represents the diversion of badly needed and scarce resources to a project that could potentially fail and fail big and will benefit China directly.

6. Opportunity for patronage and corruption. By inflating project costs, there are plenty of opportunities for patronage and outright corruption, representing a huge risk to the country and further erosion of government governance and accountability. Reports have flourished saying that amounts from overpricing the contracts could find its way into 1MDB to fill the hole in its debt obligations. Considering that 1MDB is in a rather bad state and needs rescue, such reports cannot be dismissed outright.

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10 reasons why we don’t need RM55b east coast rail link
P Gunasegaram
8 Aug 2017 – malaysiakini




Nuclear lessons for Malaysia (Part 1) (Part 2)
BN govt is directing attention to distant past and distant future, in order to distract people from present misdeeds and poor governance
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How the 1MDB Scandal Spread Across the World (WSJ)
We cannot afford ridiculously expensive RM55 Billion ECRL!
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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