Where has all the money gone?

Over the past 33 years, our cherished national petroleum company Petronas has contributed half a trillion ringgit (that’s RM500,000,000,000) to the Malaysian government and in the past nine years given RM15.2 billion to Terengganu.

How have these sums been spent?

This query was first posed by former Prime Minister Tun Dr. Mahathir Mohamad over the expenditure from the exploitation of Malaysia’s natural gift: oil. So far this year, Petronas has contributed RM67.8bil in “petro-ringgit” to the Government.

In contrast, throughout Mahathir’s 22 years of leading Malaysia, Petronas only paid RM168.8 billion to the Government. Right after the Tun’s rule ended, the amount of money “contributed” to the Government escalated. In the six years since he left, RM253.6 billion has been contributed to the government.

“I am sure the Government has spent the money wisely. It would be interesting to know what the RM253.6 billion was spent on,” commented Dr. Mahathir sarcastically.

Dr. Mahathir’s sarcasm did not go down too well with certain quarters but he is right of course — Malaysians deserve to know how every sen was spent.

In fact, we deserve to know how the entire half a trillion ringgit package was spent over 33 years starting from Tun Hussein Onn’s leadership.

Moreover, what about the RM15.2bil of royalty that has been paid to the Terengganu state government? According to Lim Kit Siang, it was “hijacked by the Federal Government when the Terengganu state government fell to PAS” and the sum was consequently misused.

For this reason, DAP calls for a public inquiry on how half-a-trillion petro-ringgit contributed by Petronas to the Federal Government in the past 33 years and the RM15.2 billion ringgit royalty to Terengganu from 2000-2009 has been spent and to give a full accounting.

Najib Razak as the Prime Minister should present a ministerial statement on various Petronas issues such as his insistence to appoint defaulter Omar Mustapha as Petronas director, the declining profits of Petronas due to the deflating global price of oil, and most of all, Petronas’ accountability to Parliament.

It is no secret that Najib Razak had been trying to push for the appointment of one of his closest political confidants, Omar Mustapha, to be the director of Petronas. Strangely enough though, this piece of news had not been picked up by local media outlets.

According to the Singapore Straits Times, Petronas’ board of directors rejected the appointment of Omar twice, because Omar had defaulted on his scholarship loan agreement with Petronas two decades earlier. Omar also id not complete the required number of years of service with the national oil corporation or a related government agency as stipulated in his scholarship agreement. In fact, Petronas had initiated legal proceedings against Omar in 2001. So the question remains, why did Najib insist on appointing Omar to the board?

The final decision of the new Petronas CEO rests with the Prime Minister and his Cabinet, when in fact MPs from both sides of the divide should be given the opportunity to give their views on the possible candidates.

As Lim Kit Siang said, “Whether Barisan Nasional or Pakatan Rakyat, parliamentarians must also be given regular updates of Malaysia’s only company on the Fortune 500 list, especially as Petronas has just reported a net profit decline by 13.9% due to low oil prices and high production costs.”

The accounting of petro-ringgit is a big deal in Malaysia especially because we are so heavily dependent on oil revenue. In order to monitor its progress, we need transparency and good governance.

As PM Najib’s mantra is “1Malaysia: People First, Performance Now”, we would like to suggest he keeps his word and make good on his promises.

Notable bailouts and mega projects involving Petronas money:

  • RM2.5bil bailout of Bank Bumiputra in 1986 as a result of the first financial scandal of the Mahathir premiership (now completely overshadowed by the RM12.5bil Port Klang Free Zone scandal involving top MCA leaders);
  • Another RM1 billion bailout of Bank Bumiputra in 1989;
  • Bailout of sick national projects, including MAS and Proton;
  • Extravagant billion-ringgit mega-projects like the Petronas Twin Towers and Putrajaya;
  • The title sponsorship rights for the Malaysian Formula 1 Grand Prix and sponsorng the Sauber PetronasS racing team.