Alleged RM1.25B ‘Scam’ Solar Project Direct Contract Ordered by Najib

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On Najib’s instruction, a well-connected company with no track record of services it was contracted to provide was paid millions of public money, making life more miserable instead of better for Sarawak’s interior schools and teachers. 

  • Najib instructed Education Ministry to appoint a company for a solar hybrid project for 369 rural schools in Sarawak
  • Contract awarded to car-rental company Jepak Holdings, which has no track record in the field
  • Jepak owned by well-connected PBB deputy division chief Saidi Abg Samsudin
  • Jepak alone took over the entire supply and maintenance of diesel generators to schools from 30 local companies
  • Jepak was also to convert the schools to solar hybrid systems
  • Najib approved RM130 million initial payment soon after contract awarded
  • Company altered parts of original contract to its favour without ministry’s permission
  • Forged headmaster’s signature in claims form
  • More than a year later, Jepak failed to provide sufficient upkeep and supply of existing diesel generators
  • No new solar power supplies installed
Stephen Then/The Star

Education Minister Maszlee Malik said he has taken stern action over the RM1.25 billion solar hybrid project in Sarawak allegedly granted to a car-rental company through direct award on the instruction of former prime minister Datuk Seri Najib Abdul Razak.

Maszlee revealed the ministry had initiated an investigation into the scandal last week.

“I am aware of the media reports of the possible misappropriation in awarding contracts of solar energy supply to schools in Sarawak.

“I have started detailed investigations into this matter since last week and relevant authorities have been notified about this,” Maszlee said. 

He told Malaysiakini that a decision was made on June 8 and will be announcing it officially on June 11.

Najib allegedly instructed the Education Ministry to appoint a company for a solar hybrid project for 369 rural schools in Sarawak.

The company also deals in car rental and is owned by a deputy division chief linked to the Sarawak ruling party.

Citing insiders, Sarawak Report website, said several companies qualified to install solar power in Malaysia were by-passed for the contract in favour of the car-rental company which lacked a track record in the field.

The website identified the company as Jepak Holdings Sdn Bhd, which is owned by senior PBB member Saidi Abg Samsudin, who is the Deputy Chief of the party’s Jepak, Bintulu seat.

Borneo Post

The other two owners are Saidi’s wife and daughter.

Sarawak Report

He is the right-hand man of Jepak state assemblyman Datuk Talib Zulpilip, who chaired the Sarawak Economic Development Corporation for many years.

Minister in the Chief Minister’s Department, Talib is said to be close to PBB boss, Governor Taib Mahmud.

Bernama

(L) Talib Zulpilip and (R) Taib Mahmud.

According to Sarawak Report, most crucially, Saidi is known to have had a close relationship with Najib and Rosmah.

Sarawak Report

He has also been photographed socialising with Rosmah’s key aide and spokesman Rizal Mansor.

Since the issuing of the contract Saidi has also become a regular golfing companion of the Chief Secretary of the Ministry of Education, Alias Ahmad, whom the documents show took an unusual interest in helping force through the Sarawak schools solar project against the advice of civil servants.

(L-R) Alias Ahmad and Saidi Abg Samsudin.

Apparently, Saidi was equally known to have forged a close relationship with the former Education Minister himself, Mahdzir Khalid.

(L-R) Mahdzir Khalid and Saidi.

Alias resigned his post just before GE14, having sidelined staff whom he accused of being particularly critical of the management of the project.

He was reportedly a personal appointee at Najib’s Ministry of Education, in that the then prime minister had overruled the minister’s own selection for the post in favour of Alias.

As part of the contract, the company was supposed to supply sufficient diesel and maintain the generators at the school.

Some of the schools reportedly did not receive a proper supply of diesel and maintenance of the generators that lead to disruptions of electricity supply.

The schools in Kanowit had to ration the operation of the generators up to twice a day due to poor maintenance by the company.

Sarawak Report

In a letter to Najib from Jepak Holdings, the former prime minister scrawled an instruction to the Education Minister. It read: “YB Datuk Mahdzir Khalid, Please issue letter of award for this project based on Jepak Holdings letter immediately.”

Sarawak Report

On March 19 and April 22, 2017, Najib instructed the secretary-general to approve the initial payment of RM130 million – almost 10 percent of the total RM1.25 billion project value.

Several months later, on July 19, 2017, former education minister Mahdzir Khalid also wrote to Najib to apply for an exception from the procurement procedure for the project.

Sarawak Report

On the letter, Najib wrote to Datuk Othman of Procurement at the Ministry of Finance: “Dear Datuk Othman, I agree to give special clearance as requested. Please implement it.”

On March 30 this year, a letter was sent to the company by the Education Ministry’s procurement and asset management department to demand an explanation on why no work had been carried out since the contract was awarded in 2017.

In the same letter, the ministry also reminded the company that the contract would end on December 31, 2019, and the contractor will have to make sure that all the solar hybrid systems are up and running accordingly.

It is understood that the Prime Minister’s Office (PMO) received the documents related to the case on June 1. The Malaysian Anti-Corruption Commission (MACC) and Education Ministry later initiated their own investigations into the matter.

On June 8, Prime Minister Dr Mahathir Mohamad also alluded to the case in a press conference in Putrajaya.

“There is a company which was supposed to supply electricity to schools, and an allocation of more than RM1 billion was given to this particular company.

“This company did not do anything at all but they have been collecting money from the government. 

“Nothing is done on the ground, not a single thing was put up. We will take action against organisations like this,” Mahathir said.

According to Malaysiakini, another document it sighted revealed that the company altered parts of the original contract without the ministry’s permission allegedly during the bookbinding process of the contract.

The terms appear to have been changed to favour the company, such as adding the phrase “with additional costs borne by the government” to a certain part of the contract.

The sentence “this proposed monitoring system and equipment should be paid for by the government through additional costs and implemented by the contractor” was also added.

Yet another unauthorised addition states that “the maintenance is necessary to be further engaged the contractor services after the expiry of contract; the contractor shall have the right to maintain the same system provided that is being done under a service level agreement between the ministry and the contractor; and with monthly maintenance cost as agreed between the parties.”

In documents dated April 5 and 6, a supplementary agreement was signed by the company to correct and amend all the clauses in the contract accordingly.

The minutes of the discussion on the supplementary agreement was signed by Mahdzir.

The news portal said the contract discrepancies were discovered by an engineer from the Works Department, who reported the matter to the PMO’s Public Complaints Bureau.

Malaysiakini said it met the engineer, who was allegedly pressured by senior officers not to reveal the matter to the authorities.

Reportedly, the engineer claimed to have been immediately transferred out from the Education Ministry.

The company also allegedly forged a headmaster’s signature in the claims form.

In a police report lodged in April 2018, the headmaster claimed to have received a call from the Education Ministry to confirm the signature for the monthly generator operation claims for November 2017.

In the report, it was noted that the headmaster did not sign the confirmation of service in the claims form, and claimed that the signature was forged by the company.’

Previous to this project, which was touted to provide cleaner, cheaper solar energy, the affected schools relied on diesel generators, which were supplied and maintained by some 30 local companies, who were required to regularly tender for the service contracts by the Ministry of Education. Jepak Holdings had held one of the contracts.

Bernama

When visiting Kuching High School in 2015, Mahdzir pledged to develop better electricity power supply infrastructure for 114 schools in Sarawak.

However, under the new contract, Jepak Holdings took over the entire diesel supply and maintenance work for all 369 schools for an agreed lump sum of RM21.8 million a month, whilst simultaneously being tasked to convert the schools to solar hybrid systems at a rate of at least ten schools a month.

Quoting insiders, Sarawak Report said the diesel contract was in fact heavily inflated above the actual cost of supplying the schools, yet the company failed to provide sufficient upkeep and supply of the existing diesel generators, let alone install the new solar power supplies.

Stephen Then/The Star

It was reported that the schools need two to four generators, but most are currently running on just one genset which can only provide electricity for a maximum of 12 hours a day.