KELANTAN has put its plans for more welfare and development programmes on hold as it has yet to receive the oil royalties promised by Putrajaya, said Deputy Menteri Besar Mohd Nik Amar Nik Abdullah.

The targets, he said, have not changed from the time of the late menteri besar Nik Aziz Nik Mat, which are to bring development to the impoverished state and double its welfare programmes.

“We cannot implement these development programmes due to our financial position right now but we have carried out a lot of programmes within our capability for the people.

“If we receive the oil royalties, these programmes will be multiplied,” Nik Amar told The Malaysian Insight.

Kelantan has been demanding its share of oil royalties since 2009. The former Barisan Nasional federal government stopped the annual payments to the PAS-ruled state for political reasons.

Under the Petroleum Development Act 1974, Kelantan is entitled to 5% of oil extracted in the state.

In 2010, the state sued national petroleum company Petronas and the government over non-payment of royalties.

The federal government, which succeeded in its intervenor application, was named second defendant in the suit.

Earlier this year, Kelantan withdrew the suit after Economic Affairs Minister Azmin Ali said Putrajaya could not pay the state the royalties it demanded if it were to be bound by legal proceedings.

Last Friday, Nik Amar said the state withdrew the summons against Petronas while negotiations with Putrajaya would continue as the federal government was an intervenor in the suit.

He also appealed to Putrajaya to speed up the payments as the state has settled its dispute with Petronas.

Nik Amar said if the federal government continues to delay payment, the state won’t be able to keep up its welfare programmes.

“The state government will wait and see,” he said when asked if Kelantan will again seek recourse in litigation if payment is not forthcoming.

State PAS secretary-general Che Abdullah Mat Nawi agreed with Nik Amar that the state could do with the oil royalties.

Most of the money would be channelled towards its development agenda, he said.

The Tumpat MP said high on the list of priorities was education, in which the state has always invested heavily. 

“What we want to do is to develop the basic infrastructure, improve our educational facilities, enhance the welfare benefits, such as special payments for births and financial assistance to primary and secondary schoolchildren.”

The state budget for 2019 is RM1.09 billion, with RM738.64 million being operating expenditure and RM110.5 million for education.

With a population of almost two million, the state has the lowest income in the country, according to a study conducted by the Khazanah Research Institute.

The study found that more than 30% of households in Kelantan earn less than RM2,000 a month.

Che Abdullah said Kelantan has made it clear that the royalty payments are to be deposited directly into the state coffers instead of being paid through the Federal Development Department as was the case during the BN administration.

“When BN paid the money to JPP, the state government never acknowledged the payment as oil royalty payments.

“This time, we want it paid straight into the consolidated fund.”

This meant the money will be audited and open to public scrutiny. It will also be debated in the state legislative assembly, Che Abdullah said.

Meanwhile, the Kelantan Islamic Consumers Association (PPIK) has called on the state government to prioritise fixing the state’s water problems.

“The people continue to suffer thirst while waiting for improvement to their water woes. They have suffered long enough.

“Roads and tahfiz schools should also get priority and be repaired,” said PPIK president Dr Mohd Fared Abdul Ghani.

The oil royalty is important to facilitate the state’s welfare programmes, he said.

Menteri Besar Ahmad Yaakob would be judged and measured by how he managed the money from the oil royalties, he added.

“The fund will definitely cover all the state’s financial problems and will enable the execution of all of Kelantan’s plans for the wellbeing of the people.” – May 28, 2019.