Mindef: Land swap losses due to ‘outrageous’ political intervention and more

PETALING JAYA: A lower valuation than the market price, weaknesses in contract management, and “outrageous” interference for political interests are among the reasons the Defence Ministry lost more than RM500mil from several land swap deals.

“Outrageous interference for political interests contributed to the weaknesses in the management of the land swap projects in the ministry,” the Defence Ministry said in a statement on Thursday (May 9).

The ministry also said, based on the findings of the report by the Governance, Procurement and Finance Investigating Committee, government land was transferred before the projects were completed.

It said violations and non-compliance of regulations, contract terms and government standard operating procedures were among these weaknesses.

According to the ministry, no comprehensive due diligence was done on the companies involved, especially on their technical and financial capabilities, and this led to delay and failure of projects.

“No careful planning by the Defence Ministry in the implementation of the projects caused the objective the projects not to be fully realised,” it said.

The statement came after Defence Minister Mohamad Sabu (pic) presented in Parliament the findings of the report from the committee led by former Auditor-General Tan Sri Ambrin Buang on the land swap deals.

The Defence Ministry said it welcomed the recommendations of the committee and several measures had been taken to ensure the government did not suffer further losses.

The committee suggested that the government take action against the officials and management involved in causing the losses.

“The land swap should be done through open tender to get the best value for money, with comprehensive due diligence conducted on the capabilities of the companies.

“The government should re-negotiate some of the land swap projects for the ones which has not been started or signed,” the committee recommended.

Other recommendations include proper management of bonds and transfer of land ownership.

An investigation was conducted between July and December on the 16 land swap projects of the Defence Ministry under Barisan Nasional government.

It was reported in February that the Defence Ministry lost more than RM500mil from the 16 land swap deals.

A total of 2,933 acres of land is involved in the 16 land swap deals, and ownership of some of the ownership of the lands has been transferred. The land is said to be worth RM4.8bil and the cost of the projects RM4.9bil.

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