PETALING JAYA: The investigation by the Governance, Procurement and Finance Investigating Committee (GPFIC) on the Ministry of Defence (Mindef) will be continued with the focus shifted to the maintenance and purchase of military assets.
GPFIC chairman Tan Sri Ambrin Buang said this was following the completion of the first investigation on Mindef over the land swap projects with a briefing of the final report of the investigation on the project tabled by Defence Minister Mohamad Sabu in Dewan Negara yesterday.
“We are moving to other areas like asset purchase, maintenance and others, we will keep the ministry informed on those,” he told a media conference which was also joined by Mohamad in the Parliament lobby after the briefing on the final report.
Mohamad, when briefing on the final report, drew the attention of the members of Dewan Negara that the losses or leaks of government revenue, through the land swap projects involving 2,923 acres belonging to the ministry, were in excess of RM500mil.
Ambrin said among the causes of the losses included the method of determining the value of replacement land which was inconsistent, with four land replacements found to be evaluated less than the evaluation of the Valuation and Property Service Department, causing a loss of RM166.81mil.
He said the committee also found that the planning for the land swap projects was weak, with only two of the 16 projects, namely, PUSPAHANAS and TUDM 323 Squadron Facilities, Bukit Banang, Johor, were identified to be contained in the Ministry of Defence Development Plan.
‘’Meanwhile, 10 of the 16 projects were initiated after receiving unsolicited proposals from the private sector whereby the private sector identified the replacement land and subsequently proposed the development projects to be considered by the Ministry of Defence,’’ he said.
The committee also found several projects which were implemented without taking into account the views and comments of central agencies such as the Attorney General’s Chambers and the Finance Ministry which indirectly negatively impacted the implementation of the land swap projects.
On this matter, Mohamad said Mindef had submitted applications to reevaluate all replacement land which was involved in privatisation projects to enable further negotiations.
“At the same time, the ministry is also involved with several series of discussions with the Public-Private Cooperation Unit to determine the latest direction in the implementation of the land swap projects in line with the suggestions for improvements from the investigation committee,’’ he said.
Mindef, in a statement released after Mohamad completed his briefing, said lower valuation than market price, weaknesses in contract management, outrageous interference for political interests were among the reasons the ministry suffered losses.
It said violation and non-compliance of regulations, contract terms and government standard operating procedures were one of the weaknesses.
The ministry also said that no comprehensive due diligence was done on the companies involved, especially on their technical and financial capabilities and it had led to delay and failure of the projects.
“No careful planning by Mindef in the implementation of the projects caused the objective of the projects not fully realised.
“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,” it said.
An investigation was conducted between July and December on the land swap which was carried out under the Barisan Nasional government.
The land involved was worth RM4.8bil and the cost of the projects was RM4.9bil.
Last April, former minister Tan Sri Rafidah Aziz publicly alleged that land belonging to the Armed Forces had been swapped by a company supposedly under the control of three key individuals.
Former defence minister Datuk Seri Hishammuddin Hussein denied the allegations, saying that it was an “outright lie”.