PETALING JAYA: Najib Razak said today that Pakatan Harapan created problems for themselves and worsened Felda’s woes last year.
The former prime minister, listing five reasons for Felda’s failure, said a pledge made in the PH election manifesto led to a number of settlers deciding against clearing their debts.
That action had a severe effect on Felda’s cash flow, as RM7.7 billion out of Felda’s RM8 billion debt comprised loans to the settlers.
Najib said that Putrajaya’s delay in appointing a new management team to take charge led to payment to settlers being deferred and projects being halted midway.
Thirdly, he said close to 20,000 settlers or about 20% of them, no longer sold their produce to Felda but to outsiders. The reason could be that settlers wanted to be paid on time and did not want their income deducted to reduce their debts.
He claimed such problems had never occurred in the past.
“So who made the promise and who is contributing to this problem?”
Felda had experienced losses as it was unable to sell all of its produce to FGV Holdings Berhad, which buys fresh fruit bunches to produce palm oil.
FGV in turn recorded a drop in sales of up to RM3.5 billion in 2018 and posted a loss for the first time since it was listed, causing a huge negative impact on Felda, whose revenue is based on FGV’s sales.
Najib, who is also former finance minister, said Putrajaya’s delay in approving financial aid for settlers was another factor contributing to Felda’s problems.
“And when they finally approve the aid in December, it only came up to RM77 million.”
The price of crude palm oil had also plunged to as low as RM1,700 after the general election in 2018.
Taking Felda’s fixed and operational costs into account, Felda was in effect selling below production cost.
Najib pointed out that Felda did not need any bailout during his time as the prime minister.
Putrajaya recently announced plans to spend some RM6 billion to bail out the agency. A White Paper tabled in Parliament noted that Felda’s total liabilities had gone up from RM1.2 billion in 2007 to RM14.4 billion in 2017. Poor management and issues related to integrity were to blame, according to the White Paper.