Anwar lodges police report over Bakun Dam corruption

By Anwar Ibrahim

This is the English version of the text of the report by Datuk Seri Anwar Ibrahim on 12 November 1999. It gives us the background to the most expensive project in Sarawak todate of which the cost overruns from RM4 billion to RM15 billion remains a mystery and the Sarawak government is now contemplating to spend our Sarawakians money to the tune of RM7 billion to buy this white elephant from the federal government. – HU Editor

Report prepared by Anwar Ibrahim over the alleged corruption over the Bakun Dam issue.

Prime Minister and Finance Minister among top officials named

Police Report Federal Court Kuala Lumpur
Police Report No. Tun HS Lee 30375/99
Dated 12th November 1999 at 12.22 p.m.

TRANSLATION OF THE ORIGINAL

I hereby submit documents from Tan Sri Ting Peck Khing (whose Ekran Berhad company was awarded the Bakun Dam project by the government) addressed to Tun Daim Zainuddin (present Finance Minister) and Dato Seri Dr. Mahathir Mohamad (Prime Minister of Malaysia), plus a directive from Dato Seri Dr. Mahathir to me, as the Finance Minister then, to speed up the approval of payment to Tan Sri Ting, contravening the law and financial procedures and without prior reference to the auditors, Price Waterhouse (who did an audit to determine how much work had Ekran completed/not completed after Bakun dam was deferred amid the economic crisis), who were appointed to scrutinise the application for compensation from Ekran, who were undertaking the construction of the Bakun Dam project in Sarawak.

The application for payment of compensation was sent by Tan Sri Ting direct to Tun Daim although he did not have any authority to approve it. The application was also sent direct to Dato Seri Dr. Mahathir, who again demonstrated his method of implementing mega projects such as Perwaja (Mahathir’s pet steel company who suffered billion dollars loss in which investigation is supposedly still on going), Putrajaya (the multi-billon new administrative centre of the Federal Government) and KLCC (Kuala Lumpur City Centre, the world’s tallest building).

He had approved the Bakun project without complying with privatisation or tender procedures. He had launched the project even before Cabinet approval. As per my previous police report with regards to Perwaja, he had established direct links with Tan Sri Ting, bypassing the Ministry and agency concerned.

The Cabinet only approved it later and he asked me to monitor it as the Chairman of the Cabinet Committee on Bakun. In fact, in the application for compensation, as stated in the letters attached, I was totally ignored, though at that point in time, I was the Finance Minister and the Chairman of the Cabinet Committee for Bakun. My firmness and reluctance to arbitrarily approve the allocation without complying with the financial procedures and regulations resulted in my being doubted.

The majority interest in the Bakun project is held by Ekran, which is controlled by Dato Seri Dr. Mahathir’s close friend and business partner of Tun Daim, that is Tan Sri Ting Peck Khing. Rasip Harun, the business partner of Tun Daim, also held equity.

Rasip Harun and Robert Tan Hua Choon, another business partner of Tun Daim, controlled Jasa Kita. Jasa Kita was involved in the abuse of the Telecom shares allocation scandal, which was supposedly allocated by Daim to the Indian community while he was the Finance Minister.

On the other hand, the shares concerned were diverted to three companies related to Dato Samy Velu (President of the Malaysian Indian Congress, the major Indian component party of the ruling natioanl coalition government). This included Clearway (a company), in which Robert Tan’s driver, Baharuddin M. Arip, was a Director, as well as Jasa Kita.

Robert Tan’s other company, Spanco, was hastily given approval for the privatisation of government transport by the Privatisation Unit of the Prime Minister’s Department. The company’s services were criticised as weak and costly, and I had asked for some clauses in the agreement to be reviewed.

Because Tun Daim had an interest, all my comments and objections were sidelined by Dato Seri Dr. Mahathir.

The Bakun project requires Sarawak government support. Therefore, Ekran secured the involvement of two sons of the Chief Minister, Tan Sri Abdul Taib Mahmud: that is, Mahmud Abu Bekir and Sulaiman Abdul Rahman who hold equity in Ekran and Pacific Chemicals.

Thereby, Ekran easily obtained timber concessions for thousands of acres surrounding the dam area, although the local residents and environmental organisations strongly protested.

Other than that, Dato Seri Ling Liong Sik’s (President of the Malaysian Chinese Association, the major Chinese component party of the ruling national coalition government) son was also appointed to the management of the project with generous remuneration.

With the endorsement and approval of Dato Seri Dr Mahathir, the decision to approve the project was made without reference to the Board of Directors of the Bakun company, or the Finance Ministry, or the Cabinet Committee.

At that point in time, when the project viability was in doubt, the Prime Minister directed HICOM Holdings, EPF (Employees Provident Fund), and TNB (Tenaga Nasional Berhad, the West Malaysian electricity generator and provider) to also hold equity.

The said companies, along with SESCO (Sarawak Electricity Supply Corporation, the electricity generator and provider), continuously protested because Tan Sri Ting had made the decision on his own, “with the Prime Minister’s agreement”, without the prior approval of the Board of Directors.

The contract was arbitrarily awarded to companies related to Ekran. For example, Pacific Chemicals (another of Tan Sri Ting’s flagship company) was given logging contracts covering 20,000 hectares in the Bakun area. FCW Holdings (another of Tan Sri Ting’s company) was promised a 4 billion ringgit (about US$1 billion) contract for the manufacture of submarine cables that also involves Dato Seri Dr. Mahathir’s son’s interests.

In the end, when it became obvious that the project was going to fail, and that we would be repeating the experience of Perwaja’s losses having to be borne by the government, I used the economic crisis that we were facing at that time as the excuse to cancel the project.

Furthermore, too many decisions involving these companies were found to be lacking tin transparency, raising problems with the KLSE (Kuala Lumpur Stock Exchange) and the Securities Commission.

Action against Ekran did not take place because of the protection given by the Prime Minister and Tun Daim. The termination of the project not only incurred the anger of both of them, but also of the families and crony companies who had interests.

The application for compensation amounting to 2.2 billion Ringgit (about US$580 million) was excessive – as revealed in Tan Sri Ting’s letter to Tun Daim dated 11 July 1998 (Exhibit one). His letter to Dato Seri Dr. Mahathir mentioned advance payment of 120 million Ringgit (about US$31.6 million). The Prime Minister, in his memo dated 12 August 1998, instructed me to pay, disregarding financial procedure regulations (Exhibit two).

I am aware that several previous police reports, accompanied by documents and letters, in particular those involving Dato Seri Dr. Mahathir and Tun Daim, have not been investigated nor has any action been taken, as if these leaders are immune from investigation and action.

On the other hand, the Alternative (Opposition) Party leaders are subjected to repressive actions and pressure. I urge the police to act professionally.

Again, I submit documents and letters, which show that conflicts of interest, bribery, and abuse of power involving Dato Seri Dr Mahathir and Tun Daim exist.

We are still waiting for investigation and action by the police (whose minister is the Mahathir appointed Deputy Prime Minister, and former Foreign Minister Dato Abdullah Badawi) and the Anti-Corruption Agency (which reports to the Prime Minister).

Exhibits one and two are attached herewith.

Thank you.

(Signed by Dato Seri Anwar Ibrahim)