Kit Siang demands Najib explain Bakun Dam, Sime Darby fiasco

DAP’s Lim Kit Siang today demanded the Prime Minister answer allegations of RM1.7 billion in cost over-runs of the Bakum Dam project and whether the government would be seeking a RM700 million bailout package for Sime Darby.

Lim claimed that Datuk Seri Najib Razak had dodged questions about the Sime Darby costs overruns scandal since the GLC-conglomerate’s May 13 admission of RM964 million losses for the second half of the Financial Year for 2010

Today Lim alleged that Bakun Dam cost over-runs amounted to RM1. 7 billion, making it “a different kettle of fish altogether.”

“It has been reported that Sime Darby has incurred more than RM1 billion in cost overruns from carrying out a civil works contract for the hydroelectric project, with one estimate putting the total cost overruns at RM1.7 billion, which is almost the same size as Sime Darby’s actual Bakun contract of RM1.8 billion.

“It has also been reported that the government has agreed to reimburse around RM700 million to Sime Darby, leaving the group with around RM1 billion to deal with,” said Lim in a statement today.

According to the Ipoh Timur MP, Najib’s statement asking Sime Darby to determine the cause of its RM964 million losses first “before the issue of responsibility” was wrong as the RM964 million losses are only for the second half of the financial year of 2010.

He said that the figure was a “small portion” of the total losses of Sime Darby in its history of some RM3.5 billion write-offs, and with more to come.

Lim provided a list taken from The Star newspaper which showed Sime Darby’s history of write-offs.

For the financial year for 2004 and 2005, the Bakum Dam project incurred a RM132 million loss in cost overruns.

Sime Bank’s losses for the financial year of 1998 in turn amounted to RM1.8 billion.

“While investigations are ongoing to determine the causes of the losses and the persons responsible, Najib should not shirk responsibility from giving Parliament and Malaysians answers which are available to him now … whether the Bakun Dam project has cost overruns of RM1.7 billion and that the government will be asking Parliament for a RM700 million bailout package for Sime Darby,” stressed Lim.

The DAP advisor remarked that former Prime Minister, Tun Dr Mahathir Mohamad “is gloating over the Sime Darby and Bakun Dam fiascos” and had gotten his revenge when he recently called on Tun Musa Hitam and the entire Sime Darby Board to resign over the cost overruns.

Musa was Mahathir’s nemesis in the mid 1980s Musa had teamed up with Tengku Razaleigh Hamzah to challenge Mahathir for his premiership.

But Lim conceded with Dr Mahathir when the former PM questioned why only the Sime Darby CEO, Datuk Seri Ahmad Zubir Murshid was made responsible for the conglomerate’s losses, while others who were involved with the project resulting in its cost overrun and delay for 3 years were not identified.

“However, Dr Mahathir should not be overhasty in his bombardment of Musa and Sime Darby, as during the Sime Bank Bhd financial crisis when it incurred losses amounting to RM1.8 billion during the 1997/8 Asian financial crisis, only the banking head Datuk Ismail Zakaria resigned while the group president and chief executive Tan Sri Nik Mohamed Nik Yaacob retired only in 2004.

“Zubir took over the position of chief executive after that.

“Who was the Prime Minister during the Sime Bank crisis of 1997/8?” asked Lim.