Terengganu’s slippery oil royalty

According to a local Umno businessperson who deals with state officials, nobody in the state administration really knows exactly how much oil royalty the federal government owes Terengganu.

By Deborah Loh, The Nut Graph

PUBLICISED figures on the amount of oil royalty remitted to Terengganu don't match. And because no clear explanation is forthcoming, expect the issue to be exploited by PAS, and glossed over by the Barisan Nasional (BN) in the Kuala Terengganu parliamentary by-election.

PAS promises to flog the issue in its campaign. The BN, however, already considers the subject closed, as the federal government has promised to repay the balance of oil royalty due, which is now being calculated. It will also let Petronas pay the full amount of 5% directly to the state every six months, beginning March 2009.

Consider the figures on the amount remitted as reported in the media:

• Minister in the Prime Minister's Department Senator Datuk Amirsham Aziz said in Parliament on 13 May 2008 that Terengganu had been paid RM7.364 billion from March 2004 to March 2007;

• Terengganu Menteri Besar Datuk Ahmad Said said in the state legislative assembly that Terengganu has received RM6.218 billion from 2000 to 2008.

Why Amirsham has a larger figure over a three-year period, and Ahmad has a smaller amount over an eight-year period, nobody can explain — so far.

Ahmad's standing answer, which he repeated when asked by The Nut Graph, is that the state government has asked the federal Treasury to list all the federal projects funded by Terengganu's oil royalty in the past.

"When we get the list, we'll be able to check whether the money was spent for projects in Terengganu or elsewhere. Then we'll be able to know how much to claim back." That's about all Ahmad can say publicly.

Discrepancies and campaign fodder

However, according to a local Umno businessperson who deals with state officials, nobody in the state administration really knows exactly how much oil royalty the federal government owes Terengganu.

"Yes, some of the money was used on federal projects, but because those decisions did not go through the state government, nobody at this level knows exactly how much went where," he tells The Nut Graph.

"And because it involves the federal government, nobody here is going to say much," says the Umno businessperson, who does not want to be named.

PAS knows this and plans to make campaign fodder out of it. It is a pet subject because oil royalty was denied to the state government after the Islamist party won control of Terengganu in the 1999 general election.

From 2000, oil royalty was channelled to the state through federal agencies. It gave the federal government control over projects funded by oil royalty. This was called "wang ehsan" (compassionate fund). All the PAS-led state government ever received in oil royalty was RM432 million in 2000.

How the wang ehsan was spent in the past eight years is the accounting Ahmad is now seeking.

The PAS-led Terengganu government filed a civil suit in 2000 against Petronas and the federal government for withholding the royalty based on political bias. The case is still pending, even after the BN won the state back in the 2004 general election and retained it in 2008. In June 2008, Ahmad said the state government would withdraw the suit.

During this campaign, PAS will also raise the issue of another apparent (because the exact amount owed is still unknown) deficit of RM3 billion. This is the shortfall from Amirsham's figure of RM7.364 billion, of which Ahmad has said only RM4.3 billion has been received.

"The numbers don't jive. PAS is asking for an inquiry to come up with a white paper report on all projects under the special fund on wang ehsan, and to explain how the money was used from 2000 to 2008," said PAS research head Dr Dzulkefly Ahmad, who has been preparing arguments on this subject for the party's campaign.

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