13 of 16 land swap deals involved ex-PM, defence minister, says Mat Sabu

Defence Minister Mohamad Sabu.

KUALA LUMPUR: Defence Minister Mohamad Sabu today claimed that 13 of the 16 land swaps carried out during Barisan Nasional’s (BN) administration involved his predecessor as well as the previous prime minister.

He added that investigations had found that the government lost more than RM500 million due to these land swaps.

Mohamad, popularly known as Mat Sabu, said many discrepancies were found, including the sale of land at lower prices, while other land swap projects were given to unqualified developers.

“Political interests were above the government’s interests. No due diligence and weak planning and negotiation on some projects,” he said at the announcement of a report on the land swaps in Dewan Negara.

“The views of government agencies to maximise the impact were not taken,” he added.

At a press conference later, Mohamad told the press that several government servants had been called by the Malaysian Anti-Corruption Commission for questioning on the land deals.

“But the previous minister has not been called yet. That will depend on the investigation team,” he told reporters.

Mohamad said the investigations were carried out from July to December last year as the ministry wished to ensure that the land swaps were value for money.

The 16 projects, covering an area of 2,923 acres, were on a design-and-build basis where the cost would be borne by the private sector.

“In return, the developer gets land owned by the government,” he said, adding that this was seen as the best option for the government to cater to the infrastructure needs of the army.

The concept of land swaps began in 1997 but Mohamad said mismanagement occurred after Dr Mahathir Mohamad’s first tenure as prime minister.

He said the projects needed the agreement of the government, the special purpose vehicle and the developer, whereby the developer would be given the land for 99 years. However, these terms were amended in 2015.

Mohamad said the private partnership project was then introduced, in which any projects involving security could be carried out through direct negotiation.

He said five projects had yet to be completed, one project failed to materialise, one was signed under a condition precedent, three were not signed, and four were approved by the Cabinet.

He said the investigation had revealed that some of the land was sold at a cheaper price. For instance, he said, a land swap in Bukit Raja, Kapar, valued at RM315 million, was offered at RM277 million.

“In total, the government lost RM166.8 million, as the prices of four land swaps were undervalued.”

He said the BN government had also lost money due to the weak management of contracts. He gave the example of time and supplementary contracts which he said were backdated, allowing developers to dodge paying fines.

He added that the Election Commission is carrying out a probe on Bera Camp, Segamat Camp and another camp at Hutan Melintang where voters were shifted just before the general election last year.

He said 12 of the 16 land swaps were carried out through direct negotiation, and that several companies were appointed despite failing to fulfil conditions to carry out the projects.

For example, he said, the Bandar Kinrara camp project began before approval was given.

“No price negotiation committees were hired to look at the price,” he added, while views from federal agencies including the Attorney-General’s Chambers and finance ministry were not considered.

He also claimed that the previous Cabinet failed to make decisions that were best for the country as some of the project costs were higher than that of the land given to the developers, forcing the government to bear the additional cost.

Mohamad said some of the projects were also poorly planned, while others were carried out on an ad hoc basis where the scope of the project was not listed when approved by Cabinet.

“There were also instances where the project scope and terms agreed on by the Cabinet differed,” he said, adding that there had also been delays in projects.

He said suggestions had been made in the report for open tenders to be carried out, project bonds to be managed in a more organised manner, projects to be renegotiated, and additional funds from the review to be channelled to the consolidated fund.

The 16 land swaps took place at Jalan Ampang in Kuala Lumpur, Tanah Batu Uban in Penang, Bukit Raja in Selangor, Pientong in Johor, Tanah Rata in Pahang, Bandar Kinrara, Selangor and Stampin, Sarawak.