Hundreds of ‘Lopsided’ Contracts Unfavorable to the Govt Signed During BN’s Time

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Hundreds of ‘lopsided’ contracts were signed by the previous Barisan Nasional-led government, according to Attorney-General (A-G) Tommy Thomas.

  • Contracts in many categories, in all ministries
  • Taxpayers pay “three times more” in ludicrous build-lease-maintain-and-transfer contracts that “does not make any commercial sense”
  • Unsung heroes – civil servants who put up a fight against the deals were brushed aside by previous PM and Finance Ministry 

He said he was using his experience in commercial litigation and contracts to help a team of AGC officers, spending hours “two or three times a week” reviewing the contracts with lawyers.

“The problem is much worse than I thought… Once I’ve come in, I have seen literally hundreds of (external and internal) contracts.

“Internally, there are hundreds of such contracts. But what we didn’t realise is the number involved. We have highway contracts, services contracts, private finance (initiatives) which are build-lease-maintain-and-transfer (46 of them), ports, etc.

“Many categories – there are over 350 contracts of that nature. Also, procurement contracts – we just drew a line – and that’s over 300 contracts of them,” Thomas told an online news portal.

The Edge Markets

“The number is just mind-boggling. All the ministries were doing it,” he added.

On external contracts, the A-G said the HSR project with Singapore was not considered a lopsided one.

“I won’t say it’s a lopsided contract. Singapore was generous by agreeing to the suspension even though the contract did not provide for it. Hence, it constituted a variation of the original contract, which Singapore agreed to.”

But projects with China that Malaysia has been suspended since the new government took over need to be bargained over with regards to the effects and consequences of termination.

“That’s a tough proposition. We’re forming teams to prepare for them.”

He said there were contracts using the PFI build-lease-maintain-and-transfer model that would result in taxpayers paying “three times more”.

“Under this build-lease-maintain-and-transfer PFI, you have the construction…but you also have a 22-year contract where the government must continue paying for maintenance and other kinds of charges, which is just absolutely ludicrous and does not make any commercial sense,” he said.

Thomas also revealed that there were unsung heroes in the AG’s Chambers who put up a fight against the deals only to be overridden by their ministers.

“They are unsung heroes. They are civil servants, and the previous prime minister and Finance Ministry just brushed them aside,” added Thomas.

He said that while the officers were familiar with the contracts, the trouble with the deals was that they were “very favourable to the counterparties and unfavourable to the government”.

Earlier, Prime Minister Tun Dr Mahathir Mohamad lambasted his predecessor Datuk Seri Najib Razak’s administration for its negotiation of contracts and deals.

He had remarked that “such stupidity has never been seen in the history of Malaysia”.

Dr Mahathir further criticised the two gas pipeline projects by Suria Strategic Energy Resources (SSER) where money was paid based on a timeline rather than work completion.

Bernama

“I have never heard of a contract where you pay on time without work (being) done. Normally, we pay according to the work done. What kind of stupidity is this?” Dr Mahathir reportedly said.