Private Financing Initiative Not a Private Matter; Public Funds are National Matter: TI-Malaysia calls for RCI

In the past few weeks, we have seen various national scandals arising from the abuse of pensioner funds, education funds and various public funds — these scandals would never have seen the light of day if not for countless and brave attempts by the media, researchers, investigative journalists, whistle-blowers and public pressure.

Whilst we are proud of the tireless and brave efforts of the enforcement agencies and the judiciary, we must not rest on our laurels and allow the same abuse of public office and public funds to fester in other forms, simply by turning a blind eye to various exposés and reports of suspicious and questionable multibillion-ringgit projects.

The Pembinaan PFI Sdn Bhd scandal surfaced in 2018 with reported debts amounting to RM50 billion. Private financing initiatives (PFIs) are a form of public-private partnership where public projects are financed by private sector concessionaires who then get repaid over the concession period. The Malaysian Anti-Corruption Commission (MACC) began investigating the PFI scandal in 2018 following an interview with Bangi Member of Parliament Ong Kian Ming, but there have been no outcomes reported to date.

The ‘PFI: The Search for Accountability’ report published by the Center to Combat Corruption and Cronyism (C4 Center) recently clearly reiterates that the PFIs are supposed to be solely managed and implemented by the Public-Private Partnership Unit, an agency under the Prime Minister’s Department.

The report revealed that Pembinaan PFI obtained loans amounting to RM30 billion from the Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (KWAP). The collateral for the loans were government land parcels leased to Pembinaan PFI by the Federal Lands Commissioner. Pembinaan PFI then sub-leased the same plots of land back to the Federal Lands Commissioner for a sum of RM29 billion to repay the loan from EPF.

Transparency International Malaysia (TI-Malaysia) is appalled by the lack of accountability and transparency over the management of national projects and the handling of this case as reported. When these purported ‘private-financing’ initiatives are guaranteed and financed by government agencies, and funding is provided by banks which are mostly owned by government-linked investment companies (GLICs); one must ask, are these projects only ‘private’ in name, to avoid accountability?

If the MACC has conducted a thorough investigation into the case and has found absolutely no wrongdoing, in contradiction to all of C4 Center’s findings (using publicly available sources), then the MACC should clear the government-linked company’s (GLC’s) name with their findings. Furthermore, where are the Federal Land Commission and Pembinaan PFI’s disclosures and updates on these high value projects, more than a decade since their inception?

TI-Malaysia echoes the call from C4 Center and civil society for a Royal Commission of Inquiry (RCI) into this multi-billion ringgit scandal, with transparent disclosure to Parliament, to avoid the makings of another 1Malaysia Development Bhd (1MDB), SRC International Sdn Bhd or Sabah Watergate. Our pension and retirement funds are not a source of off-book financing for risky and questionable projects, says Muhammad Mohan, president of TI-Malaysia.

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