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Sabah's watergate scandal unfolds

THE amount involved in Sabah’s watergate scandal is unbelievable.

The Malaysian Anti-Corruption Commission (MACC) seized RM114mil worth of assets –RM53.7mil in cold cash stashed in houses and office – from two senior Sabah Water Department officials on Oct 4.

The duo were investigated for alleged abuse of power and money laundering linked to contracts for RM3.3bil federal-funded projects channelled to the department since 2010. Two others – a Datuk businessman who is a brother of one of the officials and an accountant – were also arrested.

Six days later, MACC traced RM30mil stashed in foreign banks and another RM30mil in 127 land titles for housing, agriculture and commercial.

That’s not all.

MACC also seized nine vehicles worth RM2.7mil, an assortment of jewellery worth RM3.64mil and designer handbags worth RM500,000.

The following Tuesday (Oct 11), three Sabah Water Department employees “voluntarily” surrendered about RM1mil allegedly taken in the process of approving water projects under the RM3.3bil federal allocations.

When you go out of the state capital, you’ll find Sabahans depending on rivers, streams, ponds, wells or rain for their daily needs.

What do we tell M. R., a 34-year-old Rungus housewife from Kampung Bongkok in Pitas, about the Sabah Watergate?

Since she was born, she has relied on wells, rivers or ponds in the jungle to bathe, wash clothes and dishes, and on rainwater for drinking and cooking. Daily, she has to walk a few kilometres to carry 10 litres of water back to her house.

Her water woes worsen when there is no rain for weeks.

“The villagers will be suffering, especially getting water for drinking and cooking,” she said.

“What’s your comment on the Sabah watergate?” I asked.

“That’s what is heartbreaking. We have been asking for piped water for our village. But the excuse they give to us is the source of treated water in Pitas town is about 28km from our village,” she said.

“If the funds meant for water projects were used properly, we would have clean water supply for which we have waited for many decades.”

What do we tell M. J., a 37-year-old Bisayah civil servant from Kampung Sukai in Beaufort about the Sabah watergate?

There is a water pipe that runs through M. J.’s village. However, no water flows in the pipes and yet the villagers are billed for it.

“The pipes were installed in 2010. We had water for about one year and then it went dry, maybe because of leakage,” he said.

Now many villagers rely on the blue water tank they got during elections.

“When there is no rain, some of the villagers have to buy water from a town about 30km away for drinking and cooking,” he said.

“For other uses, the villagers get murky water from wells and a polluted river along a mangrove swamp.”

“What’s your comment on the Sabah watergate?” I asked.

“As a true Sabah-born I’m extremely disappointed. The people’s first call is not delivered because of greed. If only a portion of the money were distributed, the villagers would not be thirsty for the promises made by politicians.”

What do we tell N.V. H., a 49-year-old Chinese businessman from a suburb in Tawau town, about the Sabah watergate?

Once a week, there is a water cut lasting three to 12 hours in his residential area. During the previous El Nino season, there were 12-hour water cuts on alternative days for two months.

With the constant water cuts in Tawau, he had to install two 400-gallon stainless steel water tanks and pneumatic water pumps at his home. He also had to install two 100-gallon water tanks and automatic on-off water pumps at the ground floor of his shop and another 400-gallon water tank and pneumatic water pump at the first floor. The total cost is RM16,000.

N.V.H.’s household has never experienced water woes, as supplies from water tanks last for five days.

“What’s your comment on the Sabah watergate?” I asked.

“Of course I’m angry when I come across all these water scandals. But we can’t do anything about it,” he said.

What do we tell M. S., a 47-year-old Bajau Sama managing consultant from Kota Belud, about the Sabah watergate?

The shortage of clean water in his district is unexplainable, he said.

“What’s your comment on the Sabah watergate?” I asked. “There is an abundant water source from Mount Kinabalu, flowing through rivers across Kota Belud. The rivers are full of water yet it has failed to be converted into clean water,” he said.

The water supply covers about 30% of the villages in the district and the rest depend on untreated gravity water.

“Sad to say that some villages have a piping system but no water. The water department implements piping projects in every election. Yet the clean water shortage is here to stay,” he said.

I pray that the MACC’s investigation reaches to the top. And that those who are responsible will pay for their greed.

One man's meat by Philip Golingai The Star/ANN

19 engineers nabbed in probe as graft scandal widens with arrest and seizure in assets across Sabah

(File pix) The Malaysian Anti-Corruption Commission (MACC) has nabbed 19 engineers to facilitate investigations into the Sabah Water Department’s multi-million ringgit graft scandal. Pix by Mohd Adam Arinin ; MACC held a news conference in KK where they announced and displayed a whopping haul of RM114 million worth in cash, jewellery, land grants and branded goods. — Bernama pic

KOTA KINABALU Oct 21 2016: The Sabah Water Department graft scandal has widened, with the arrest of 19 engineers across the state and the seizure of RM7.8mil in assets, including RM4.2mil cash.

The district or divisional engineers, aged 29 to 59, were detained at 27 locations in the state as the Malaysian Anti-Corruption Commission (MACC) continues its probe.

Its investigations have already implicated top officials in the department in connection with the siphoning of money from RM3.3bil worth of federal allocations for state rural water projects since 2010.

The engineers were remanded for between three and seven days in Kota Kinabalu, Sandakan and Tawau after they were arrested on Wednesday.

Yesterday, MACC deputy commissioner (operations) Datuk Azam Baki said they may have been collecting as much as 27% to 30% in kickbacks from the contracts awarded. But he did not disclose the amounts involved.

He said investigators also seized procurement files and were sifting through the documents.

Asked about speculation on social media that certain top politicians were linked to the scandal, Azam said the probe was focused on civil servants at this point.

“For now our investigations do not involve any political figures in the state or at federal level.

“I am asking people not to politicise the matter and not to take advantage of the investigations for their own interest,” he added.

He said MACC officers were going through the numerous documents in detail before submitting the investigation papers to the Deputy Public Prosecutor.

“We assure everyone that our investigations will be transparent and professional,” he said.

The latest collars were a second wave to the arrests of the two top water department officials and the seizing of more than RM190mil in assets, including RM57mil cash, since Oct 4.

Apart from the officials, who have been suspended by the state government, MACC also nabbed a senior officer’s businessman brother, his accountant and an engineering adviser to the state Finance Ministry. All were released early this week.

The officials were alleged to have abused their powers by awarding contracts to 38 companies owned by their families or cronies, to siphon off the federal funds.

MACC investigators were also looking into suspected money laundering as they try to recover some RM30mil that has been reportedly stashed in overseas accounts. The Star

One more SWD engineer held

An array of cash both ringgit and foreign currency, gold jewellery, land titles and luxury brand watches and handbags were seized from two high ranking Sabah state agency officials in a graft investigation. ― Picture by Julia Chan

KOTA KINABALU Oct 25 2916: Another district engineer has been arrested in the ongoing massive graft probe into the Sabah Water Department.

The officer, who was arrested at 6.40pm on Sunday, was produced before Tawau magistrate Faizal Che Saad who allowed the Malaysian Anti-Corruption Commission’s (MACC) application for a five-day remand.

Five of the department employees who were among the 19 department staff detained on Oct 19 were released on bail yesterday.

The five were freed on RM50,000 bail each after being produced before magistrate Cindy Mc Juce Balitus at about 2.40pm.

Earlier this month, five suspects, including the department’s director and deputy director, were detained under Ops Water which also saw the seizures of some RM190mil in cash, properties and other valuables.

Also picked up during the second wave of the operation were 22 engineers and technicians, some of whom were said to have received as much as 30% in kickbacks for the water projects.

The investigators seized RM8.4mil in the second phase of their probe.

MACC deputy chief commissioner Datuk Azam Baki confirmed the latest arrest when contacted.

Meanwhile, sources said there was pressure for the investigators to speed up their probe into the case.

“It would take a much longer time to wrap up investigations due to the vast amount of documents involved,” they said, adding that the amount of documents seized was equivalent to “half the size of a tennis court”.

“Due to this, we have to fly in more officers from Putrajaya and several states to Kota Kinabalu to assist in gleaning, sorting out and scrutinising the documents.

“Every piece can provide a vital clue,” one of the sources said.

All the documents – in the millions – are now kept in a secret location here and a team of officers are taking turns to guard them round-the-clock.

“As this is a high-profile case, certain quarters are trying to take advantage of the situation. But the MACC will not allow any outside elements to jeopardise our probe.

“The investigation team is doing its best to come up with an airtight case before submitting the investigation papers to the Attorney-General’s Chambers to press charges against those responsible,” added the source.

The probe is one the biggest ever in the country to be carried out by the MACC involving abuse of power, corruption and money laundering from the RM3.3bil in federal allocations for water since 2010.

Civil service back in vogue - for the wrong reasons

THE civil service may fall short in meeting the job prospects of a large number of people, but it has made up with abundant opportunities for self-enrichment – if one is prepared to take the risk of facing the law.

In a nutshell, the “Watergate” incident involving top officials from the Sabah Water Department is increasingly serving as an eye opener for the majority who had shunned the civil service previously due to limited prospects and lower remuneration compared to the private sector.

As the number of people involved in the “Watergate” discovery keep stacking up, with some junior officers returning money to become state witnesses – the chatter in coffee shops is on the level of abuse within the civil service when it comes to handing out contracts through a restricted tender process.

To be fair, the majority of Malaysia’s 1.2 million-strong civil service are merely ordinary employees providing a service to the public. They carry out their duties diligently despite the constraints and remuneration.

However, there is something wrong with the system when we hear that even basic matters such as the transfer of a student from a mediocre school to a school that is “highly sought after”, or students seeking grants and scholarships from the Government may require some kind of monetary gratification to someone within or outside the system.

Generally, cases involving a small exchange of money go unreported because the party that is prepared to hand out the gratification just wants to go about their business with a minimum of hassle. At most, the topic is fodder for talk among friends or relatives. But when millions are seized from the homes and offices of civil servants – money supposedly meant to upgrade the water services in Sabah – it no longer is merely coffee-shop chatter.

It has been a topic of serious discussion almost everywhere in the last 10 days.

When Budget 2017 is announced next week, the nation will see another round of Government allocation to various ministries for their expenditure and development. In the budget last year, the Federal Government estimated the operating and development expenditure for this year to be RM265.22bil. Generally, the development expenditure is less than RM50bil and the rest goes towards the cost of operating the Federal Government.

While in previous years, the focus was on the Government’s growing operating expenditure, which means less money for development, the question that will be racing on the minds of many is how much of the amount allocated is going to be siphoned off in the form of corruption and kick-backs for inflating the cost of projects and “fixing” restricted tenders.

The Government has limited options in its spending, considering that there is a target to keep the fiscal deficit down. This year, the fiscal deficit is expected to be negative 3.2%, which is a remarkable improvement compared to negative 4.3% in 2012 and a figure of more than negative 5% in 2009.

Next year, we are supposed to bring down the fiscal deficit to 3%, meaning Government spending has to be cut further.

It is part of the plan to have a balanced budget by 2020, which is only four years away. A balanced budget means that what the Federal Government receives in revenue is enough to cover its operating and development expenditure.

Many countries tend to keep a surplus budget, something that comes in handy during bad times. A fiscal surplus effectively means the Government earns more money than it spends. It has reserves that can be touched when it needs to spend more than what it earns. And a fiscal surplus or balanced budget commands the respect of rating agencies.

Earlier this week, Australia’s 30-year debt papers garnered a triple-A rating despite the country going through an economic slowdown due to the fall in the resources sector. The country used to run a surplus budget until 2007.

As for Malaysia, achieving a balanced budget by 2020 is part of a plan to shore up the country’s balance sheet. However, the Government must ensure that the machinery works towards optimising every ringgit spent.

In the case of the Sabah Water Department incident, alleged abuse was allowed to happen due to the practice of having “restricted tenders” when awarding contracts. It is a common practice in all departments and ministries. The only difference is the amount that can be awarded.

For instance, at the ministry level, the level of approval for the minister to award contracts through restricted tenders can go up to RM100mil or more. As long as there are eight to 10 companies that are registered with the ministry competing in the restricted tender exercise, the minister can award the job to the lowest bidder.

The companies tend to act in concert, something that is known to the officers handling the tender process. When the contract is awarded to one company at an inflated price, the other companies get paid for their participation.

The officers in the ministry are also being rewarded and it goes down from the top to several layers down. The restricted tender process can easily be a farce!

The argument that favours a restricted tender is that it can be awarded quickly compared to an open tender, where the evaluation process is often time-consuming. However, a competitive open tender process allows for an efficient price-discovery mechanism.

For instance, the 1,000MW Prai power plant in Seberang Perai was awarded on a competitive tender. The winning bid came in on a tariff of 34.7 sen per unit, which is now the benchmark for any future gas-fired power plants.

Restricted tenders have been quite prevalent in the past few years. However, they have a massive amount of drawbacks, based on the rising number of civil servants being charged or under investigation for corruption.

However, the restricted tender process has brought back the allure of the civil service – for the wrong reasons though.

There was a time in the 1960s and 1970s when civil servants were the preferred choice of grooms in arranged marriages. It was apparent especially among Indian parents.

From the mid-80s onwards, the shift was towards those working in the private sector, especially prospective grooms in large multinational companies holding mid-management positions.

Now, the civil service sector is back in vogue – especially positions that involve the awarding of contracts. All thanks to the enormous publicity that “Watergate” has drawn.

- The alternative view by M. Shangmugam, The Star/ANN

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Adviser nabbed in Ops Water investigation

KOTA KINABALU: A Sabah Finance Ministry adviser has been arrested in the on-going probe into abuse of power and corruption at the Sabah Water Department (SWD).

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