A ROYAL commission of inquiry is required to get to the bottom of the off-book financing provided under the government’s Private Financing Initiative (PFI), Transparency International Malaysia said today. 

TI-Malaysia president Muhammad Mohan said in a statement that one such initiative given to the Pembinaan PFI Sdn Bhd reported debts amounting to RM50 billion. 

“PFIs are a form of public-private partnership where public projects are financed by private sector concessionaires who then get repaid over the concession period.  

“The Malaysian Anti-Corruption Commission began investigating the PFI scandal in 2018  following an interview with Bangi MP Ong Kian Ming, but there have been no outcomes reported to date,” Muhammad said. 

He added that a recent report by C4 Center — ‘PFI: The Search for Accountability’ — revealed that Pembinaan PFI obtained loans amounting to RM30 billion from the Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (KWAP).  

The collateral for the loans were government land parcels leased to Pembinaan PFI by the Federal Lands Commissioner. 

Pembinaan PFI then sub-leased the same plots of land back to the Federal Lands Commissioner for a sum of RM29 billion to repay the loan from EPF. 

“TI-M is appalled by the lack of accountability and transparency over the management of national projects and the handling of this case as reported.  

“When these purported ‘private-financing’ initiatives are guaranteed and financed by government agencies, and funding is provided by banks which are mostly owned by Government Linked Investment Companies (GLICs); one must ask, are these projects only ‘private’ in name, to avoid accountability?” 

He said that MACC must also reveal its investigations into Pembinaan PFI and clear the firm if it had not done any wrong. 

“TI-M echoes the call from C4 and civil society for an RCI into this multi-billion ringgit scandal, with transparent disclosure to Parliament, to avoid the makings of another 1MDB, SRC International or Sabah Watergate. 

“Our pension and retirement funds are not a source of off-book financing for risky and questionable projects,” said Muhammad. – September 12, 2022.