Anwar Ibrahim reveals mismanagement in Malaysian pipeline projects

Prime Minister Anwar Ibrahim has disclosed significant governance issues regarding the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects. He reported that by 2018, approximately RM8.3 billion, or 88% of the total contract value, had been paid out despite physical work progress only reaching 13%. This discrepancy was attributed to a contract structure where payments were triggered by timeline milestones rather than actual construction progress.

The two projects, approved in 2016 via Suria Strategic Energy Resources Sdn. Bhd. (SSER), had a combined value of roughly RM9.4 billion. The MPP project, valued at RM5.35 billion, was intended to connect Melaka and Negeri Sembilan to Kedah, while the RM4.06 billion TSGP project aimed to link gas terminals in Sabah. Both contracts were awarded to China Petroleum Pipeline Bureau (CPPB) through direct negotiation, with 85% of the financing provided by the Export-Import Bank of China (Cexim) and backed by government guarantees.

Anwar stated that a loan repurposing agreement with Cexim has reduced the potential RM8 billion loss from these scrapped projects to RM3 billion. The agreement allows RM5 billion to be redirected toward the Northern Perak Water Supply Scheme (NPWSS). The NPWSS will involve transferring raw water from Sungai Perak to the Bukit Merah dam and includes the construction of water treatment plants to supply water to northern Perak and Penang.