PSCI threat to sue Shahrir an empty threat as its executive chairman Amin Shah will be ousted at the PSCI EGM  next month – more important issue is why no government officials have to account for such mega-privatisation failure

Media  Statement
by Lim Kit Siang  

(Parliament, Tuesday): The threat by PSC Industries Bhd  (PSCI) to institute legal proceedings against the  Public Accounts Committee chairman Datuk Shahrir Samad for his comments on   the failure of the RM5.4  billion privatization for the construction of six  offshore patrol vessels (OPVs) as part of a RM25 billion contract for 27 OPVs is just an empty threat, as its executive chairman Tan Sri Amin Shah Omar Shah will be ousted at the PSCI extraordinary general meeting (EGM) on August 18.

The new management that would be installed by the  PSCI EGM – emanating from  Lembaga Tabung Angkatan Tentera(LTAT) subsidiary, Boustead Holdings Bhd with 32.5% stake,  Telekom 8% and Danaharta 1.5% - will fully endorse Shahrir’s strictures of the current PSCI management, including his reference to “greed, corruption and mismanagement” as the cause of the failure of the PSC-Naval Dockyard Sdn. Bhd to build the six OPVs and the need for RM200 million bail-out, i.e.  RM80 million to pay the local vendors, suppliers and contractors and another RM120 million to salvage the first two vessels, which are nearing completion after seven years.

Shahrir should have nothing to fear as no such legal proceedings will eventuate from PSCI, which would have changed management already  if Amin Shah (who has only a  direct and indirect interest of 2.16% and 9.49% respectively in PSCI)  had not outmanoeuvred the proxies of the three major shareholders at the PSCI AGM on June 27, 2005.

Shahrir will be in a spot of difficulty if there had been a legal suit against him for he would not be protected by parliamentary privilege, as he made his remarks outside formal  Parliamentary and Public Accounts Committee  proceedings. Parliamentary rules and regulations should be urgently amended so that  a PAC chairman is given protection when  sued because of his remarks in the course of his parliamentary duties.

While Shahrir is right that the eight-year RM5.4 billion privatization of  the six OPVs to PSCI is “a gross failure”, his criticisms of  the “greed, corruption and mismanagement”  of PSCI is only half the picture – when equal attention should have been given to incompetence, negligence and inrresponsibility of  the Economic Planning Unit and the Ministry of Defence in allowing  such a “gross failure” of a mega-privatisation  project without any effective check and monitoring!

Many questions about government responsibility for the gross failure of the PSCI privatization for the six OPVs cry out for answer.  DAP MP for Tanjong Chow Kon Yew on 18^th April 2005  and I on 25^th April 2005 spoke specifically on the RM5.4 billion OPV privatization scandal in Parliament – but the Finance Ministry and the Defence Ministry appear to be completely helpless to hold the PSCI to account to strict compliance to  its contract, except to engage in a long drawn-out boardroom battle to oust Amin Shah from the PSCI board and management through the proxies of Boustead, Telekom and Danaharta!

Is there absolutely nothing the government could have done to deal with the PSCI/OPVs privatization scandal if it does not have proxies like Boustead, Telekom and Danaharta with sufficient stakes as shareholders to stage a coup d’etat at the PSCI EGM  next month?  If so, the incompetence and ineptitude involved in approving the OPVs privatization by the EPU and the Defence Ministry is  mind-boggling, which itself calls for a full public inquiry.

The Prime Minister, Datuk Seri Abdullah Ahmad Badawi said the government will act appropriately against PSCI for failing to build the six OPVs for the Royal Malaysian Navy in accordance with the RM5.4 billion privatization contract while Deputy Prime Minister and Defence Minister, Datuk Seri Najib Razak said that the OPV privatization “won’t necessarily be terminated but we must make sure that the management of the company is capable of carrying out their responsibilities”.

What the Prime Minister and his deputy are saying in their long-winded way is the same thing - that the government solution lies in ousting Amin Shah from PSCI board and management through its proxies of Boustead, Telekom  and Danaharta,  while  the taxpayers will have to  pay the full costs of the privatization failure without anyone in government having to account for such gross failures.

This is just not good enough and Members of Parliament from both the Barisan Nasional and the Opposition must make clear that they want is not a half picture, but the full picture of the failures of the OPV privatization – both that of PSCI on the one hand and the EPU and the Defence Ministry on the other.

Shahrir should rush the report of the Public Accounts Committee on the PSCI and OPVs to Parliament in time for a debate on the first day of the budget meeting on Sept. 27, as Parliament must finally decide whether to endorse or reject the PAC recommendations.

(19/07/2005)