FINANCE Minister Lim Guan Eng and anti-graft officials will go to China to meet officials there over a newly uncovered scandal involving two pipeline deals worth RM9.4 billion that Malaysia had with the China Petroleum Pipeline Bureau (CPPB).

Prime Minister Dr Mahathir Mohamad, who announced this today, said the cabinet also agreed to review the practice of payment according to project timeline milestones instead of progressive work completion.

This was what had led to Suria Strategic Energy Resources Sdn Bhd (SSER), a Finance Ministry subsidiary, paying CPPB RM8.3 billion, which was 87.7% of the project value, for only 13% of work done.

Lim yesterday revealed this latest scandal under the previous government.

“Payment schedules based on timeline milestones without regard for the work’s progress, is wrong. We have to study why this was allowed,” Dr Mahathir said today after chairing the cabinet meeting in Putrajaya.

Dr Mahathir said the SSER contract had unfair terms for Malaysia, and that Lim and the Malaysian Anti-Corruption Commission would go to China to investigate the matter.

Yesterday, Lim said Finance Ministry officers had lodged a report with the MACC over SSER and the pipeline projects.

The projects were awarded to CPPB in November 2016 in deals signed by then treasurer-general Irwan Serigar Abdullah, who was also SSER chairman.

SSER was to undertake the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects.

The MPP involved a 600km-long multi-product petroleum pipeline connecting Malacca and Port Dickson to Jitra, Kedah, costing RM5.35 billion while the TSGP was to build a 662km-long gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau at a cost of RM4.06 billion.

Lim had also revealed that SSER was an offshoot of the same people behind SRC International, a former subsidiary of 1Malaysia Development Bhd.

SSER president Mohammed Azhar Osman Khairuddin was also a director in a company with links to businessman Low Taek Jho. – June 6, 2018.