Dear Tony: This is not your father’s land
LSS Report
I really wanted to tell you “This is govt land and not your father’s land” – exactly what Lim Guan Eng recently scolded the Chew Jetty residents in Penang, but I shall refrain since it is rude for non-Tokong class people to say such things.
But it is a nice phrase so I shall keep it as the blog post title
Tony Pua is good at misleading his followers with hyperbole, hypocrisy and selective facts. He is doing what he is doing best – to mislead those followers of his who placed their blind trust in Tony allowing him to easily dupe them.
Let me pick-apart Tony Pua’s latest attack on 1MDB titled “Only the financially illiterate will believe that there is no bailout for 1MDB”
His allegations in Red italics, My reply is in Blue:
TONY: In an interview with The Edge this week, 1MDB President Arul Kanda boasted that 1MDB was not bailed out by the government like in the cases of national carrier Malaysian Airline System Bhd (MAS), or national carmaker Proton.
In the case of MAS, the bailout already cost upwards of RM20 billion of losses – money that will never be recovered and it is still not over yet as we embark on yet another bail-out run which started from Tun Mahathir’s ill-advised decision to privatized to his crony and bail him out at double the market price.
In the case of Proton, the company was built on the backs of the Rakyat suffering from high car prices due to high duties and taxes. Besides the human lives costs that was incurred if Malaysian had been able to afford safer cars in the past, it is estimated the actual losses from the Rakyat in terms of financial costs is estimated at upwards of RM300 billion – not inclusive of higher interest charges arising from financing a higher amount than necessary.
Again, this is money that will never be recovered.
Now what Proton’s sales have plummeted in recent years due to stronger competition from cheaper car prices as a result of Najib’s policies, Proton is now needing free money from the government – up to RM2 billion, which Najib has so far refused to give despite Mahathir being made the Chairman in April 2014.
In 1MDB’s case, other than guarantees and a higher than normal return from land profits, not a single sen of Rakyat’s money was used in any bail-out of 1MDB.
Only a politician who is willing to deceive himself and deceive the rakyat would even dare say that 1MDB is worse than MAS or Proton.
In fact, after these 3 major rounds of rationalization, 1MDB is left with an estimated asset value (net of debts) of RM13 billion which is poised to grow further.
You are free to dispute these hard numbers here.
TONY: He claims, “now that we have legally binding agreements for the IPIC swap, Edra sale and Bandar Malaysia, we don’t need to take any money from the government. There is no question about a bailout.”Arul Kanda perhaps has been a little too quick to forget that the Najib administration granted RM950 million of emergency credit to 1MDB in February last year, despite having promised the Parliament that the Government would not bailout 1MDB.Then a month later, the Government provided 1MDB with another “letter of support” to borrow another US$150 million (RM650 million) from Bank Exim.
I am not quite sure how you would term letter of support and a line of credit as a bail-out. These are financial assistance for sure – unless you forgot that 1MDB has always been 100% owned by the government and that the total actual cash investment by the govt in 1MDB is only RM1 million.
Letters of support is necessary to allow 1MDB to borrow at the best rates. In fact, such letters of support were also used for all those infrastructure projects you see such as the MRT and LRT extensions. It is normal for the govt to help out their own 100% owned companies (which are essentially part of govt too) to reduce borrowing costs.
Lines of credit and loans received using support letters have to be repaid. In the case of the RM950m and USD150m lines of credit, both can already be repaid – if not already done so by 1MDB already.
Not an additional sen of hard cash from your GST money or from govt finances was given to 1MDB to repay these loans.
Then in last August, Tenaga Nasional (TNB) took over a 2,000MW power plant concession from 1MDB which the latter failed to deliver, after the Government allowed TNB to revise upwards the electricity tariffs to be paid for power supplied by the new plant.
This is the part that I find most shameful. Because of continuous attacks by you and Tun Mahathir, TNB was asked to take-over the 2000MW Jimah East power-plant projects as 1MDB was unable to get loans to finance the project nor able to get injections of capital from the govt to continue with it.
1MDB had spent RM83.68mil on developing this project and Tenaga took it over for a mere RM46.98mil. – causing a loss to 1MDB.
If 1MDB had been able to finance this project, it would certainly be worth much more than a mere RM46.98mil for a 2000MW IPP project which 1MDB won fair and square against YTL in an open tender.
And to add insult to injury, TNB also requested and got an upward revision of tariff as TNB believed they could not make money as the tariff awarded to 1MDB was too low.
I AM GLAD YOU ADMIT THIS NOW AND I HOPE YOU HOLD UP YOUR HANDS AND TAKE RESPONSIBILITY FOR BEING PART OF THIS.
The final tariff for this 25 years concession to TNB will be 26.67 sen/kwh which is 1.34 sen higher than the initial tariff of 25.33 sen/kwh awarded to 1MDB.
I estimate this increase to eventually cost the rakyat a total of RM8.6 billion – all thanks to the political attacks on 1MDB.
Would you be compensating any of this RM8.6b loss to the rakyat?And if 1MDB had given in to your rants in early 2013 (USD1=RM2.96) to bring back the USD2.31 billion Cayman funds (which forms part of the IPIC-1MDB asset-debt swap) to Malaysia, today (USD1=RM4.33) 1MDB would have been looking at a forex loss of up to RM3.2 billion too.Would you also be compensating for that potential loss?
