Thursday, July 19, 2018

Petronas - Mahathir's fave piggy bank

Malaysiakini - Towering hypocrisy above the trillion-ringgit debt hole: by Dr Kua Kia Soong


After the alarmist alert over the country’s RM1 trillion national debt and the tear-jerking calls for patriotic citizens to donate to Tabung Harapan to plug this debt hole, we are now told that a new skyscraper, Tower M is to be built to dwarf the soon-to-be tallest TRX 106.

Whatever happened to the call for austerity in government spending and the need to cut down on grandiose schemes? No prizes for guessing where the money for this latest white elephant will come from.

The skyscraper will be built by KLCC Holdings (KLCCH), the property investment arm of our prized national oil company and supposed “sovereign wealth fund”, Petronas.

During Dr Mahathir’s reign, Petronas had to build what was then the tallest building Dayabumi in the 1980s and then, the Petronas Twin Towers in the 1990s. Does anyone know if there is any breathing soul in Dayabumi at the moment?

Meanwhile, the office occupancy rates and average rental in Kuala Lumpur city centre, Kuala Lumpur fringe and Selangor are expected to continue their downtrend in 2018.

Petronas, the cash cow for Dr M’s projects

Do Malaysians realise the shocking fact that we have failed to build a sizeable sovereign wealth fund like that of Norway’s ($1 trillion in assets; it made an annual return of $131 billion in 2017 alone!) simply because the substantial revenue from Petronas all these years has been squandered on grandiose projects and bailing out failed crony capitalists?

Since the 70s, the NEP has been largely funded by the exploitation of offshore oil which, by 1985 contributed 26 percent of all government revenues when oil registered a 29.6 percent share of the major commodities export.

Razaleigh Hamzah (Ku Li), who was the founding chairman and chief executive of Petronas, has been quoted as saying that Putrajaya has been using the oil and gas firm as a cash cow, especially in bailing out government-linked outfits in financial trouble.

He said that from its inception in 1974 until 2011, Petronas had paid the government RM529 billion in dividends, taxes, petroleum proceeds and export duties. He said the reliance on Petronas to help government-linked companies out of financial trouble had been going on since 1985. (Kua Kia Soong, Racism & Racial Discrimination in Malaysia)

As finance minister from 1976 to 1984, Ku Li said Petronas had rescued Bank Bumiputra with a RM2.5 billion bailout in 1985 and again in 1991 when it coughed up another RM1 billion.

He said Petronas also had to rescue Dr Mahathir’s son’s financially ailing Konsortium Perkapalan Berhad for RM2 billion in 1997.


He added that Petronas was made to underwrite the construction of the Twin Towers, located in the heart of Kuala Lumpur, for RM6 billion and the building of the extravagant Putrajaya, the administrative capital of the Federal Government, for RM22 billion.


He said: "This amount could have been used more productively to fund a national pension programme for Malaysians, as has been done by a certain Scandinavian country."

Ku Li said the exorbitant amount of the bailout and construction of these projects that was forced onto Petronas had deprived the company of the much-needed cash build-up for reinvestment, which would ensure its business sustainability.

According to him, since 1997 the subsidies to the national power supplier, the independent power producers and some other non-power outfits amounted to RM136.5 billion. And while these power producers continued to enjoy subsidised fuel price, the petroleum subsidy to the consumers – which purportedly cost the government RM14 billion in 2011 – was partly discontinued.

All in all, Barry Wain (Malaysian Maverick, 2012) claimed that during Mahathir’s term in office from 1981 to 2003, the prime minister lost or squandered RM100 billion through mismanagement, corruption and financial scandals. If it had not been for the fortuitous outflow of oil, most of the prestige projects associated with the Mahathir era would not have been possible.

During Abdullah Ahmad Badawi’s term as prime minister, the retired Mahathir was angry with Badawi for suspending the construction of a monorail in Putrajaya (and the crooked bridge to Singapore) because of fiscal constraints. Mahathir continued to insist that Petronas was making record profits.

The profligate spending on all these grandiose projects during Mahathir’s reign has left little for reinvestment and social services for the present and future generations as a “sovereign wealth fund” such as Petronas is expected to accomplish:

“Insofar as ethical debates have begun to touch on how the assets of such funds should be distributed, they have tended to ask how these should be distributed internally, to citizens of the countries in question. Sovereign wealth funds are the creation of sovereigns, after all, and we might think that the first duty of a sovereign is to its people…” (Chris Armstrong, Sovereign Wealth Funds and Global Justice)


Tell that to the East Malaysians

Not surprisingly, our East Malaysian brethren are not pleased to hear that our precious oil revenue will be siphoned into building “Tower M”. Before the last general elections, East Malaysians were told they should have a bigger share of Petronas’ revenue of which they had been deprived by the BN government all these years. How are they supposed to react to this news of Petronas building another monument to megalomania?

Sabah and Sarawak politicians and activists have long held that both states should get a fairer share of its oil and gas resources, pointing to the Malaysia Agreement of 1963 and income disparities between the Borneo states and peninsular Malaysia and rightly so. They also insist that the Pan-Borneo Highway, good roads, hospitals and schools are more urgent than another skyscraper in Kuala Lumpur.

Urgent need for transparency in Petronas’ accounts

Petronas belongs to the Malaysian people and yet through the years of profligate spending and bailing out failed crony capitalists, there is no transparency in its accounts. Malaysia’s official accounts do not show how Petronas’ money is being spent – and the government has steadfastly refused to disclose any details about that.

Official data show Petronas payments to the state more than doubled between 2005 and 2011 as oil prices soared. Malaysia’s spending swelled too, widening the budget deficit even though revenues rose. But Malaysia would not disclose what the Petronas money is being spent on. Petronas’ CEO and board, as we know, serve at the pleasure of the prime minister.

Transparency International has listed these key recommendations for Petronas:

• Publicly disclose exhaustive lists of subsidiaries, affiliates, joint ventures and other associated entities independent of their materiality status;

• Disclose key financial information on a country-by-country basis.

The new Finance Minister has waxed lyrical about transparency in the “new” Malaysia. He can start by making Petronas’ accounts transparent and accountable to Parliament. Having said that, I am reminded by Barry Wain that:

“Not required to disclose its financial accounts, Petronas reported by law to the prime minister rather than the finance minister as might be expected. It was Dr Mahathir’s favourite piggy bank, to be raided in emergencies and on other special occasions.

Will any of the peoples’ representatives in the new Parliament champion this urgent cause of the Malaysian people? Until the “new” Malaysian government gets started with making the accounts of Petronas transparent, please spare us the expense of yet another dysfunctional erected structure in the already claustrophobic Kuala Lumpur city centre.


KUA KIA SOONG is adviser to Suaram.


21 comments:

  1. Ktemoc Bull.
    There is no Tower M.

    Why is Ktemoc spreading Fake News ?

    ReplyDelete
  2. Wow 3 to 4 posts a day. U sure r binging hehehe

    ReplyDelete
    Replies
    1. Najib head going to be gone so. So is he. Ah so? The end of cheebye mother fucker kaytee and this pathetic blog

      Delete
    2. please lah - I swear I did NOT fCk your mpther

      Delete
    3. I swear that i wanna cut off kaytee head one day

      Delete
  3. We need more expose on how the M government manages the country, otherwise they think the country's wealth belongs to them and cronies exclusively.

    Right now, the Lim s as well as the Phua s are barking like mad dogs.

    Chinese leaders under BN were dogs but under PH they became MAD Dogs. Really doing a disservice to the chinese community in Malaysia.

    ReplyDelete
    Replies
    1. R u Chinese?

      Or u r aneh infested with cinapek apologiasis!

      Why no tell the newly mint minister of unity about the deplorable state of yr kindred under ketuana rule.

      That bark might be more reliable as a sympathetic chant lah!

      Delete
    2. Ravan definitely aneh la. Probably kaytee too

      Delete
  4. Kua Kia Soong is a bitter, disappointed old man eager to Hentam Pakatan Harapan whichever way he can, even based on Fake News.

    He detests Mahathir. He detests the DAP leadership.
    Both now combined in the new Government has driven him into uncontrollable paroxysms.

    Sad old man.

    ReplyDelete
  5. Time to focus on the Parliament - and respect the Parliamentary process.
    In a democracy, the Executive derives its position and authority from the Ruling Party possessing the confidence of the majority of the House.

    In a country with Rule of Law, the governments actions are governed by Law. The most important functions of Parliament are Executive accountability, making, amending and repealing the laws of the Country.

    I look forward to Parliament forming select committees on important areas of national concern, getting testimony from stakeholders and experts, the way the US Congress and UK Commons now functions.

    Under Bijan , there were too many cases of Government officials just giving Parliament trivial answers and even refusing to answer Parliament.

    ReplyDelete
    Replies
    1. cabinet is a one-man show with mahathir

      Delete
    2. Mahathir will always be a strong personality, supremely confident in himself.
      That is both a strength and weakness.

      In the last 70 days, there have been important modifications and/or backtracks from Mahathir, after strong input from the public or from the Cabinet.

      That is a good sign of power sharing, and respect for alternative opinions.

      No 1-man show with Mahathir 2.0

      Delete
    3. With mamak 2.0¿???

      Wakakakakaka……

      The echoing sound of a broken record, passed its shelf life!

      Delete
  6. Obviously, you and the KKS of Suaram prefer to riot on unsubstantiated news and rumours and blow it up to give a picture of unwarranted extravagant expenditure by PH Govt and doing it via milking the Treasury or Petronas or other statutory bodies which was the norm during BN Govt. days.

    How come KKS and Kaytee were mute when TRX 106 was being proposed and built when we already had the world tallest twin towers?

    On a lighter note, please remember that all our previous PMs have been Men and thus

    "Men will forever be Men" "Boys will forever be Boys"

    You just can't change them. From young to old, they will always want to show whose Prick is longer.

    It has happened to all the Pharoahs, Emperors, Kings, Dictators, Presidents thru history till this day.

    If TDM suddenly do have a sudden urge to show his egoistic manhood , maybe instead of proposing and building a new Tower M, it would be better to reduce the height of TRX 106 and at the same time reduce the cost of building it.

    At least TDM will be consoled that his Petronas Twin Towers will still remain the highest building in Malaysia. Don't compare with other countries. There is no end to their pricks being longer and longer every year. Just be comfortable with our own Malaysian pricks.

    Wakakakakakakaaka

    ReplyDelete
  7. Dr kua's life mission just like chabo's is to get even with maddy hence all his articles are suspect

    klcc already stated there is no such project planned

    ReplyDelete
  8. With the speed of blog posting, r u outsourcing yr writings, vi-a-vis yr sifu ke!

    Besides, the incoherency & yesterday's news syndrome prove that these hired hands r newbies, with volume in mind. Content & accuracy be damned!

    KT is showing sign of fatigue!

    Loose WOULD be very please - another one bites the dust le.

    ReplyDelete
    Replies
    1. I hope that kaytee did psycho maryam lee to write posts for him. Seriously if thats true, i will 阉 kaytee kukuciao

      Delete
    2. in my village an Ah pek is an expert at capon-ising hooks - I'll book an appointment for you - doesn't bother Pauline because she's only interested in you tongue, wakakaka

      Delete
    3. Picture lei....talking is easy you know

      No proof anybody can anyhow talk cock sing song

      Delete
  9. "Not required to disclose its financial accounts" is tis true? I thot petronas declare profit n dividend every year?

    ReplyDelete
  10. M Tower sounds like a kind of mythical beast. Like the unicorn?

    ReplyDelete