1MDB scandal costs Malaysia RM50bil

KUALA LUMPUR: Finance Minister Lim Guan Eng (centre) visiting a exhibition during National Tax Conference 2018 'Taxation in a Changing Economy' at Kuala Lumpur Convention Centre, yesterday Also present were Chief Executive Officer Lembaga Hasil Dalam Negeri Malaysia (LHDN) Datuk Seri Sabin Samitah (right) and Secretary General of Treasury Datuk Seri Dr Ismail Bakar - Bernama

KUALA LUMPUR: Malaysia would have been able to go ahead with the shelved mega-projects if not for the 1Malaysia Development Bhd (1MDB) scandal and other “mini 1MDBs” that are plaguing the country, said Finance Minister Lim Guan Eng.

“We would have been able to afford all these, including the originally planned light rail transit 3 (LRT 3).

“The 1MDB scandal itself cost us RM50bil.

“Many other scandals that are similar to 1MDB has cost us tens, and tens of billions of ringgit. We are now paying the price of the 1MDB scandal,” Lim said at a press conference during the National Tax Conference yesterday.

“And yet, until today, there are people who say that these scandals do not exist.

“But we know they exist because you and me are paying for the debts that have been incurred.

“We have paid RM7bil and we are going to pay another RM1.3bil this year (for 1MDB),” he added.

He said the scandals had cost the country a lot of money and sometimes, the people couldn’t comprehend the massive nature of these scandals.

“And where are we going to find the money (to pay the debts)? We have to find the money by hook or by crook.

“We have to find it to pay it off because we will not allow Malaysia to go into default, and this is why we have to rationalise all these projects that were approved without any reference to our ability to pay,” Lim said.

“For example, the LRT 3. If the Barisan Nasional government continued to rule, the price tag for the LRT 3 would be sustained at RM32bil. This amount won’t be borne by us but by the future generation: our children,” he said.

Lim noted that the cost of the LRT 3 was deliberately hidden by the previous government when it only cost RM10bil when it was initially announced.

“When the-then Cabinet approved the LRT 3 in 2015, it was only for RM10bil.

“Many people didn’t believe the cost then; how can it only be RM10bil and that it should be much higher.

“Of course, they didn’t want to tell you the bad news and only told you the good news first. But alas, the actual cost is RM32bil after we found a letter dated March 2018 by Prasarana Malaysia Bhd, where it admitted that the actual cost is not RM10bil,” he said.

“That is why it had to apply for an additional RM22bil in financing on top of the RM10bil already secured.

“This is what happens when we had a government that wants to hide from you the facts...that does not want to tell you the true cost of these mega-projects,” Lim added.

He said that despite the cost cuts and adjustments to the LRT 3, the rail line would still be a very strong and viable alternative for users to choose, rather than being stuck on the highways.

Lim said that there were three types of scandals or modus operandi of the wrongdoings that have been uncovered so far and they are: falsifications, hidden files and red files.

He also noted that while the country was in the midst of sorting out these scandals, its fundamentals remained sound, as evidenced by the low non-performing loans and deep capital markets.