Negeri Sembilan : Sleepy Hollow No More

Negeri Sembilan has always been a relatively “quiet” or “stable” state. No scandals, no wastage and looked like a happy ship, unlike Kuala Lumpur and Selangor where numerous scandals or dubious arrangements have been discovered, highlighted, reported and until significant pressure from people like Nadeswaran, Terence Fernandez and Lim Kit Siang etc, Malaysians would not have heard of PKFTZ, Mickey Mouse tour by Menteri Besar, Zakaria Istana, Toyo’s property etc.

Or is there something simmering beneath in Sleepy Hollow?

Note: 2004 (47.5 mil); 2005 ( 46.95 mil); 2006 (25.37 mil); 2007 (20.32 mil); 2008 (15.60 mil)

According to LAPORAN KETUA AUDIT NEGARA, PENYATA KEWANGAN KERAJAAN NEGERI DAN PENGURUSAN KEWANGAN JABATAN/AGENSI NEGERI SEMBILAN TAHUN 2008, the state has been running deficit budget for past 5 years consecutively.

If a government is spending more than it can earn continuously, it must get money from elsewhere so naturally the state government of NS borrowed from the federal government.

The borrowing as at end of 2008 is RM2 billion, which is about 10 times the annual income which stood at RM260.7 million for 2008. The cost of funding is not cheap. Look at 4.5.4 below the graph.

“4.5.5 Pada akhir tahun 2008 bayaran balik pinjaman berjumlah RM16.26 juta telah dibuat bagi 23 pinjaman. Bayaran balik pinjaman ini terdiri daripada bayaran balik pokok berjumlah RM2.19 juta dan bayaran balik faedah berjumlah RM14.07 juta.”

Only 13.5% on the repayment go towards reducing the principal while the rest constitute interest payment. Isn’t it great to be the federal government?

Ok, interest charged by the federal government may be out of control of the state government. Mitigating consideration is perhaps the state government really did borrow the money and apply it for the benefit of the citizens of NS?

On page 21 of the report, it is stated that,

"ii) Analisis terhadap perbelanjaan pembangunan bagi tahun 2008 berbanding tahun
2007 menunjukkan tujuh maksud perbelanjaan pembangunan yang melibatkan
empat Jabatan mengalami peningkatan perbelanjaan antara 0.4% hingga 725.6%.
Manakala sebanyak tujuh maksud perbelanjaan yang melibatkan lima Jabatan
mengalami penurunan perbelanjaan antara 4.1% hingga 29.9%.

iii) Semakan Audit mendapati dua maksud perbelanjaan pembangunan yang melibatkan Pejabat Setiausaha Kerajaan Negeri mengalami peningkatan perbelanjaan antara 34.5% hingga 725.6% pada tahun 2008 berbanding tahun 2007. Projek yang terlibat adalah Kerja-kerja Kecil dan Bangunan Kerajaan masing-masing berjumlah RM7.7 juta dan RM23.20 juta. Butir-butir perbelanjaan pembangunan adalah seperti di Jadual 4.23. "

725.6% cost overrun related to "Pelaksanaan Projek Ubahsuai Bangunan Kerajaan" ...something that the man and woman in the street cannot benefit directly, if at all.

In at-arms length commercial world, a cost overrun of 50% could mean curtains for some project manager but for the State Secretary of NS, during the GE year of 2008, the renovation of the state government building suffered a budget overrun of 7 times from its planned expenditure. One wonders who were the lucky contractors….

- update: I need to correct myself. The 725.6% means increase against last year's expenditure and not 7 times over its budget. however, my opinion that money has been diverted from meaningful and rakyat centric purposes to whatever renovation contracts that would not benefit rakyat on a wide spread basis

Common sense would tell us that when you spend a lot of money on something, one has to cut back spending on another. E.g. buy more clothes, eat less or things like that.

So on page 21 also, it is stated that

“iv) Tiga maksud perbelanjaan pembangunan mengalami penurunan perbelanjaan yang ketara iaitu 21.2% hingga 29.9% pada tahun 2008 berbanding tahun 2007. Penurunan ini adalah disebabkan oleh peruntukan bagi maksud perbelanjaan Rancangan Tebatan Banjir Negeri Sembilan yang melibatkan Jabatan Pengairan Dan Saliran dibelanjakan kurang daripada 50%.”

So actual money allocated to handle the flood issues faced by the rakyat was not spent according to plan. Let’s look at some relevant news reports…..

Thursday April 17, 2008
Floods force out 28 families in Temiang (click "Floods" to read the news)

Sunday April 20, 2008
Squatters blocking anti-flood plan (Click "squatters" to read the news)

Sure, blame it on the rakyat. I rest my case.

According to the graph above, the department that fouled up its budget by 726% got most of the allocation under the 9th Malaysian Plan….ok, what for?

Lo and behold!

Item 12 shows the State Secretary Department ran 80 tourism projects…make sense to you?

If you take Bil 6 – 12, excluding 8, the State Secretary got RM465.4 million (if you include the Pejabat Menteri Besar allocation of RM45 million) to implement 125 projects, an average of RM5.8 million per project. By comparison, RM35.9 million was allocated for 46 agricultural projects, about RM780,00 per project, over 5 years of RMke-9.

Securing flood supply in NS should be the primary concern of the state government. I remember there was a boom time for the vegetable farmers in Sikamat and also the pig rearers in Bukit Pelanduk. Not only residents of NS gotten fresh and cheaper source of food, the pigs were exported to Singapore to earn valuable Singapore Dollars.

Just like week, in a NTUC shopping mall at Ang Mo Kiow,...I noticed the frozen pork consumed by Singaporeans are imported from....BRAZIL. ASEAN Trade Block opportunity illustrated.

As the government is borrowing from the federal government at an exorbitant rate, due care must be given to cash flow management so that the crippling debts can be repaid as soon as possible and we have this gem of a generous state government.

The 2 charts below showed that more than RM280 million of state fund was lent to Menteri Besar Incorporated and Syarikat Imapro Sdn Bhd and from 2004 till 2008, only repayments made were RM12.35 million and RM10.62 million in 2007/2008.

The 8.64 million owing by Imapro is more than half of the state deficit for 2008 which was RM15.6 million. Collect that and half of the deficit is wiped out. Who is behind Imapro?

A blogger wrote this:

2. Taukeh tanah untuk ternakan babi ialah orang Melayu (Syarikat IMAPRO Sdn. Bhd. milik Bumiputera 100%). Dengan modal RM2.00 ianya mengaut untung sebanyak RM1,718,232.00 (pada 31 Disember 2006). Kadar untung ke atas modal ialah 859,115 kali ganda. Ini adalah untung atas angin

The Auditor General has this to say about the MBI:

“Penurunan (pelaburan saham negeri) ini antaranya adalah disebabkan oleh Lain-lain Pelaburan berjumlah RM1.82 juta yang merupakan pelaburan oleh Menteri Besar Incoporated telah dikeluarkan daripada Penyata Akaun Memorandum. Pelaburan tersebut diuruskan oleh Menteri Besar Incoporated telah dikeluarkan daripada Penyata Akaun Memorandum secara berasingan. Semua hasil pelaburan yang diperolehi tidak diperakaunkan sebagai hasil Kerajaan Negeri.Kerajaan Negeri juga tidak mempunyai sebarang pegangan saham dalam syarikat milik Menteri Besar Incoporated.”

In a nutshell, the AG reported that dear Menteri Besar just took away the state money to trade in shares and not accounting its action and results, not even a sen, back to the state government. I wonder which state statute empowers him to do so. I hope there is a provision for that.

Well, sleepy hollow, I miss thee, for you hold more mystery that I never thought it could be…..