By Adib Zalkapli
KUALA LUMPUR, March 20 — Petronas founding chairman Tengku Razaleigh Hamzah (picture) revealed today that the national oil company had planned to preserve the country’s petroleum wealth for future generations.
The Gua Musang MP said Petronas had planned to set up a heritage fund to which a certain percentage of its oil revenue would have been channelled.
Speaking at a forum on oil royalty here, Razaleigh also said that Petronas had wanted an advisory body to plan the exploitation of petroleum.
“The national petroleum advisory council to advise the prime minister on how petroleum ought to be exploited or whether we should leave the oil underground, that is for the petroleum council to consider and suggest to the prime minister before Petronas decides what to do with the oil resources,” said Razaleigh.
He was responding to another panellist at the forum, law professor Datuk Dr Shad Saleem Faruqi who suggested a trust fund be set up to keep about 25 per cent of the oil revenue for future generations.
Shad was of the opinion that the Petroleum Development Act 1974 “is quite weak” in terms of ensuring the protection of oil revenues for future generations.
Earlier in his presentation Razaleigh reiterated his stand that the Petroleum Development Act was meant to channel some of the oil revenue to the poor East Coast states.
“It is not for us to hoard or to build another Twin Towers or another city like Putrajaya,” he said referring to the two mega projects under the administration of Tun Dr Mahathir Mohamad.
Razaleigh also continued his attack against the Federal government’s plan to only pay the Kelantan government a goodwill payment, or ‘wang ehsan’, rather than the five percent royalty as provided for under the agreement with Petronas.
“Wang ehsan is for beggars, like ‘sedekah’ (donation), you can see what has happened to Terengganu,” said Razaleigh.
He cited the case of the collapsed roof of the one year old Sultan Mizan Stadium in Terengganu, built with the goodwill payment, to prove his point on the mismanagement of oil revenue.
“All this is because of bad management. But the real story is somebody stole the money,” said Razaleigh.
While Shad described the goodwill payment as highly questionable and urged the Federal government to use existing laws if it wish to continue making the discretionary payment.
Kelantan is currently demanding from the Federal government a five per cent royalty for oil extracted off its shore.
But Putrajaya has maintained that the East Coast state is not entitled to the payment as the oil and gas are extracted from waters that are beyond the three-nautical mile limit prescribed as the state’s territorial waters under Malaysia’s Emergency Ordinance (Essential Powers) No 7 1969.
The Federal government has instead promised to pay goodwill payment or ‘wang ehsan’ through Federal government agencies in the state.
Terengganu also suffered a similar fate in the year 2000, when the Federal government stopped oil royalty payments after PAS took over the government a year earlier.
Royalty payments to Terengganu were reinstated early last year.