KUALA LUMPUR, Dec 8 – DAP National Publicity Secretary and Member of Parliament for Damansara Tony Pua issued his second media statement on Wednesday saying that several negative comments former Prime Minister Tun Dr Mahathir Mohammad is reported to have made in his upcoming book against an adviser to the former Finance Minister Lim Guan Eng was a reference to him.
The following is the text of Tony Pua’s media statement Part 2
As highlighted in the Part I of my statement yesterday, MalaysiaNow reported that former Pakatan Harapan Prime Minister (PM), Tun Dr Mahathir Mohamad made public his ‘grouses’ in his upcoming book with references clearly targeted against me, even though I was not specifically named. His additional remarks to the press yesterday in response to my statement however, confirmed that I was the intended target.
I have clarified yesterday that I have never threatened the developer referred to by Mahathir, Djoko Tjandra, because I have never met or spoken to him. All discussions and negotiations sanctioned by the Minister of Finance, Lim Guan Eng, were led by top Ministry officials and I was never present on those occasions. I am disappointed that Mahathir continues to believe the words of an Indonesian businessman, who is now behind bars in Indonesia for fraud and corruption, instead of trusting his own Members of Parliament.
Based on the excerpt from his book published by MalaysiaNow, Mahathir also claimed that “there were also occasions when this adviser spoke publicly on behalf of the government despite having no standing to do so.”
In this case, Mahathir would be referring a specific statement, or ‘open letter’ which I had issued on 10 October 2018 to the ‘Directors of MMC-Gamuda’ with regards to the MRT2 project. This letter is separately attached with this press statement.
I remember clearly that Mahathir was absolutely livid after the letter was published, summoning Lim to admonish him for my action. It was a letter that lived long in Mahathir’s memory. Even late in 2019, more than a year after the letter was published and the matters involved were long resolved, Mahathir was still griping about it in his conversations with Lim.
It was well known in the industry even prior to 2018 that MMC-Gamuda had the inside track with the Najib Razak adminstration to be awarded the Project Delivery Partner (PDP) of the extremely lucrative MRT projects via direct negotiation. The ministerial reply to me in Parliament then specifically confirmed that MMC-Gamuda was awarded the project because they were the first to propose it.
Given the size and scale of the MRT2 project which will indebt the Government by at least RM50 billion (inclusive of land acquisition costs and interest payments), Lim directed the Ministry to carry out a study to determine if the cost of the project was a fair price and whether any significant savings could still be achieved, given that the project at that stage was already 40% completed.
One of the largest engineering consulting firm in the region was appointed to carry out the review. The study concluded that there were very significant savings to be achieved via a re-negotiation, restructuring or a re-tender without sacrificing the functionality, viability and operations of the project. In fact, the study discovered that comparative figures with regional MRT or equivalent projects which purportedly showed that the Malaysia’s MRT1 and MRT2 projects were among the lowest price presented by the consulting engineers of the project were concocted.
To be absolutely certain, the Ministry of Finance (MoF) even secured written confirmations by other large-scale contractors that they were prepared to bid at a lower price in the event of a re-tender for the balance of the project.
Extensive negotiations took place with the top management of MMC-Gamuda. In the end, as stated in my Open Letter, the MoF accepted a 23% reduction of the cost of the MRT2 Above Ground works from RM22.64 billion to RM17.42 billion, saving the tax-payers RM5.22 billion.
However, MMC-Gamuda was not prepared to significantly reduce the cost of the MRT2 Underground (mainly tunnelling) works. They made the final offer of a RM2.13 billion ‘discount’ to the cost of RM16.71 billion.
The study by the consultants however estimated potential savings between RM4.2 billion to RM5.8 billion – after taking into consideration all penalties and potential financial settlement to MMC-Gamuda in the event of a termination per the terms of the contract. The question then was whether we were to give up an additional RM2 billion of savings.
The above was presented to Cabinet for a decision, and it was decided on the 8 Oct 2018 that the MRT2 Underground contract with MMC-Gamuda will be terminated per the terms of the contract, and there will be an Open Tender issued to complete the remaining works.
Stunned by the news, MMC-Gamuda immediately launched a massive public relations and social media campaign with the hashtags #pray4MRT2 and #save20kjobs. This was to gain public sympathy over the termination, in an attempt to reverse the Cabinet decision. In the process, it demonised the Government as cold, heartless, irresponsible, reckless and perhaps even vindictive.
The Finance Minister refused to take the public affront lying down and instructed that I refute the public allegations, which I duly did with the Open Letter to the MMC-Gamuda Directors.
The public support for my Open Letter was overwhelming. MMC-Gamuda responded immediately, halting their own campaign, to seek re-opening of negotiations with the MoF.
To cut a long story short, we successfully reduced the cost of the MRT2 Underground contract by an additional RM1.47 billion and reinstated MMC-Gamuda to complete the project.
Overall, the MRT2 review exercise saved tax-payers a massive RM8.82 billion, excluding savings on interest cost. It must be emphasized that this was achieved without sacrificing functionality, viability and operations of the project, or caused any job losses for the workers. The project has since proceeded smoothly and is due for completion by January 2023, after some COVID-19 enforced delays.
The entire review exercise was completed in a little more than 3 months.
However, things were not smooth behind the scenes. As was only to be expected, the Directors of MMC-Gamuda had direct access to the Prime Minister. Throughout the entire negotiation process with the MoF, the Directors made countless trips to lobby Mahathir. jAnd each time, the PM will demand answers from Lim.
Lim will patiently and diligently explain these issues to Mahathir, even when some of the issues raised have already been previously (repeatedly) explained.
As tedious and as frustrating as it was – this was obviously not the only issue Lim had to appeal or explain to the PM (e.g., The Exchange 106 project), he persevered and he was determined to achieve the maximum possible savings for Malaysians. To do so would help reduce the country’s debt and to have more funds for more projects and social programmes for the people.
Ultimately, the Finance Minister succeeded in convincing the PM (perhaps, reluctantly), and subsequently the Cabinet, that the best course of action was to terminate and re-tender the MRT2 Underground contract.
However, when Mahathir read my Open Letter, he blew his top. The only reason why I was not fired as the Political Secretary to the Finance Minister, an appointment under the PM’s purview, is because Lim told him that I wrote the letter under his instructions (which was the truth).
After MMC-Gamuda sought to re-open negotiations, Mahathir had advised Lim not to press too hard. He even told Lim how much is ‘enough’. Lim led the final negotiation with MMC-Gamuda himself and the final ‘discount’ was arrived relatively quickly and amicably to the satisfaction of all parties. The Directors even assured the Minister that despite the significant cuts to the cost, the project is still profitable.
More than a year later, late in 2019, Mahathir still griped about the Open Letter to Lim. If I don’t recall wrongly, it was part of their conversation about being a “business-friendly government”. He took offence at the fact that I used the word “hell” in my statement, although he couldn’t remember the context in which the word was used.
Even I couldn’t remember using the word when Lim relayed the conversation to me. I checked, and this was what I wrote, “RM2 billion is hell of a lot of money when I see my MoF colleagues who are struggling and scrimping to find RM50 million savings here, and RM80 million cuts there for the upcoming Budget.” I’m pretty convinced that the term “hell” here is more than justified.
I have no regrets writing the Open Letter, even if Mahathir is still pissed about it. It says a lot about the man when he chose not to record the RM8.82 billion savings for the rakyat for the MRT2 project under his premiership in his memoirs, but instead whine about an apparently irritating political secretary.
On the other hand, I am extremely proud to be part of the team that brought these mega-multi-billion ringgit savings to the people, all within a very short 20-month stint at the MoF. Even if it wasn’t instructed by the Minister, I see nothing wrong with a Political Secretary or even a backbencher Member of Parliament defending and explaining the policies of the Government. Isn’t that precisely our role? In my personal view, if there was a particular weakness in Pakatan Harapan’s time in government, there were too few leaders who were willing to stand up and be counted in times of controversy, for fear of rocking the boat.
But Mahathir would have none of it. Instead, he claimed that I “spoke publicly on behalf of the government despite having no standing to do so.” It is really odd, and admittedly very disheartening, that defending the Cabinet decision is deemed an offence.
The following is the text of Tony Pua’s media statement (Part 1 issued on Tuesday Dec 7)
In an article published by MalaysiaNow, it was reported that former Pakatan Harapan Prime Minister, Tun Dr Mahathir Mohamad made public his ‘grouses’ in his upcoming book with references clearly targeted against me, even though I was not specifically named.
I have no access to the actual book to read the full details of the references. However, the allegations published in the article have cast severely negative aspersions against me, which require me to respond immediately against the falsehoods published.
Let me start by stating that I was appointed the Political Secretary to the Minister of Finance, Lim Guan Eng after Pakatan Harapan won the general election in 2018. I worked and acted at the behest and instructions of the Minister of Finance, to assist him with his vast and heavy responsibilities.
Mahathir singled me out as “a trusted adviser to former finance minister Lim Guan Eng” and accused me of “unauthorised involvement in government business”. He accused me being “in business negotiations involving the government despite not being empowered to do so, and had resorted to threats.”
Relating one incident involving the adviser, Mahathir alleged that I “threatened a property developer who had faced financial problems in a joint venture project with the government to develop a multi-billion ringgit complex in Kuala Lumpur. Now, this particular DAP adviser did in fact make this threat despite the fact that billions had already been spent, and he did so without reference to or indeed getting any authorisation from the government.”
Let me state upfront that this is a completely false allegation.
It is also not the first time Mahathir has made the allegation. He had summoned Lim back in November 2018 to his office to reprimand him for my purported actions. The problem is, I could never have “threatened” the property developer because I have never personally met or spoken to the developer!
The developer is Mulia Property Development Sdn Bhd, part of the Indonesian Mulia International Group. The project involved is Exchange106 which is part of the controversial Tun Razak Exchange, a 1Malaysia Development Bhd (1MDB) legacy.
The project is estimated to cost approximately RM3 billion, of which RM1.8 billion was to be funded via a loan. Unfortunately, the developer was unable to secure the required funding from any financial institution. The obvious reason is that the ultimate owner of Mulia was a well-known wanted Indonesian fugitive – Djoko Tjandra, who is also known as Joe Chan or Pak Joe.
In 2016, to bailout the project, the former Finance and Prime Minister, Dato’ Seri Najib Razak agreed to provide the RM1.8 billion funding for the project via a Government Guarantee in exchange for a ‘temporary’ 51% Ministry of Finance (MoF) ownership of the project.
After Lim became the Finance Minister, he was briefed by both the then Deputy Treasurer-General Dato’ Asri Hamidon and TRX City Sdn Bhd officials on the project. We were informed of the issues relating to the project including the failure to comply with fire and safety guidelines, absence of certain regulatory approvals as well as most importantly, the discovery of improper related-party payments and transactions.
We were also briefed that the MoF has a specific clause in the shareholders’ agreement with Mulia that when Mulia repays the RM1.8 billion funding between 24 to 36 months, MoF’s 51% share of the project will be ‘returned’ to Mulia in exchange for a fee not exceeding RM200 million.
However, in the event Mulia fails to repay the RM1.8 billion loan within 36 months, then MoF will have the right to purchase the remaining 49% from Mulia for RM1. This Call Option clause protects MoF to a certain extent in the event of Mulia default.
A decision was then made by the Finance Minister to ensure that all regulatory compliance issues are resolved and irregularities rectified, before further drawdowns are disbursed for the project. This was clearly the right thing to do to protect MoF’s 51% interest and the tax-payers’ monies in the project.
I was tasked by the Minister to monitor the progress and resolution of the above issues. However, all negotiations and discussions with Mulia was led by Dato’ Asri, who is the current Treasurer-General today, and TRX City officials. I was never present in their discussions.
Pak Joe was furious that a due diligence (as provided under the shareholder’s agreement) was being requested, especially after the royal treatment he has received from Najib. He secured a meeting with Mahathir, arranged by one of Mahathir’s ‘trusted advisors’ to protest against the actions by the MoF. Mahathir was furious when he was told by Pak Joe that Tony Pua had “threatened” to take over Mulia’s 49% stake for only RM1 after the latter had invested more than RM1.1 billion in the project already.
Lim defended my role in the above dispute and explained the issues involved several times to Mahathir in writing. There was even a private investigation report commissioned by TRX City on Mulia International in 2015 which confirmed Pak Joe’s criminal fugitive status in Indonesia.
In fact, Pak Joe is now sitting in jail in Indonesia for fraud and corruption after being arrested by Interpol police in Kuala Lumpur in 2020. Senior police and attorney-general officers in Indonesia were all found guilty of conspiring with and receiving bribes from him.
These documents were all presented to Mahathir. The Exchange106 case was also deliberated several times in the Cabinet between November 2018 to May 2019, and occasionally thereafter. Ultimately, the Cabinet fully endorsed the position and actions to be taken by the MoF.
As an elected Member of Parliament for Damansara, I am proud of the little role I’ve played in the above case because I have helped to protect the interest of Malaysian tax-payers and ensured that the project is completed without the Government being short-changed.
As far as I am aware, all substantive issues and disputes between TRX City and Mulia have been resolved and rectified.[ The only matter outstanding today is the RM1 call option for MoF to exercise to acquire Mulia’s 49% stake in the project after the expiry of 36 months.
I regret that Mahathir is extremely selective in his memory. It is unfortunate that he prefers to believe the words of an extremely crooked foreign tycoon, previously convicted of cheating hundreds of billions of rupiah from Bank Bali in 2009; and subsequently convicted again for forgery in 2020 and bribery in 2021.
Mahathir should have been proud that his government has successfully protected the interest of the rakyat in this multi-billion ringgit scandal and recorded that achievement in his memoirs. Instead he has chosen to be petty and wrote about how he was able to ‘put a stop’ to the lowly political secretary of the Minister of Finance.
The above statements from Tony Pua have been published almost in their entirety and Weekly Echo bears no responsibility for their contents.