Ku Li says no law for compassionate payments

By Neville Spykerman KUALA LUMPUR, Feb 5 — Tengku Razaleigh Hamzah today declared that the law does not allow Petronas to give compassionate grants instead of oil royalty to states, but stopped short of calling it illegal. The Kelantan prince maintains that the state is entitled to oil royalty while the federal government, which is only offering RM20 million as “wang ehsan” or a compassionate grant, says that oil is being extracted beyond the maritime boundaries of this East Coast state. Kelantan is of one of Malaysia's poorest states.

"Some people say this could be an illegal payment. I am not a lawyer to determine this," said the Gua Musang MP, who was the founding chairman of Petronas. The Umno veteran has come under fire from his own party for his stand, with some party leaders claiming he has reversed his earlier opinion when the government substituted oil royalties with a grant to Terengganu when PAS took power in 1999. Razaleigh pointed out that the “wang ehsan” payments to Terengganu was made to the wrong parties instead of the state government which is named under Section 4 of the Petroleum Development Act 1974. He added that Petronas should have honoured the agreements with state governments. “Under the Act, the cash payment must be made to the state government concerned and not to any other party if payment is to be made,” said the former finance minister, popularly known as Ku Li. He noted that the “wang ehsan” went to the Crystal Mosque in the Islamic Civilisation Park, a leaking swimming pool, a collapsed stadium, a collapsed school lab and a collapsed bus station and the Monsoon Cup sailing regatta. The Umno leader pointed out that the Crystal Mosque cannot be used for worship and is surrounded by the poor in Kuala Terengganu while the Monsoon Cup is for the rich. He said the issue must be corrected and recommended the formation of a National Petroleum Advisory Council, which is provided for under the Petroleum Development Act. Razaleigh said the council should be made up of senior national leaders to advise the prime minister, adding his stand was not about politics but about doing the right thing. He has been the only Umno leader to insist on Kelantan's right to oil royalties, and publicly made his stand at a gathering in the Sultan Mohamed IV Stadium, Kota Baharu on Jan 28. Menteri Besar Datuk Nik Abdul Aziz Nik Mat and other PAS leaders were present at the gathering. Razaleigh also pointed out that the laws and agreements in question were signed between Petronas and each state government and not the federal government. He added that these agreements must be honoured. “The federal government has no part in it. The issue of royalty is between states government and Petronas," Razaleigh said in response to question on whether the issue was being politicised. He added that in his opinion, Petronas should not have followed the directions of politicians but act in accordance with the law. He also said the late Tun Abdul Razak, who directed him to set up Petronas, always had the welfare of the poor and poor states in mind but he was sad and ashamed that this had been forgotten by the people. Tun Razak's son Datuk Seri Najib is now the prime minister. "He told me in no uncertain terms to ensure the poorest states in the East Coast and Sabah and Sarawak would benefit from the oil wealth.” Razaleigh said he never anticipated the difficulties that the Terengganu and Kelantan governments now face when oil was first found. He said he supported the Terengganu state government's refusal of payment until the issue is straightened out, adding those responsible for abusing funds should be investigated. As for Kelantan, he said the people were ashamed at the government's offer of “wang ehsan”. "They offer to give RM20 million when cigarette companies give RM50 million to RM100 million to sponsor sports events," said the politician, who has faced calls from Umno to step down as MP because of his stand. Razaleigh said his concern was whether Umno could retain Gua Musang if he quit. Sumber: Malaysia Insider