The Terengganu government has never resorted to illegal activities in order to increase its revenue from timber extraction, said state exco member Mustafa Ali.

He said all decisions and dealings in respect of awarding timber concessions through an open-tender system, as well as the logging activities, have been carried out within the ambit of federal and state laws.

Mustafa, the economic development, petroleum, industrial and human resources committee chairperson, was asked to comment on a recent report on the Selangor Daily website, which hinted at irregularities in the process of awarding logging concessions.

The pro-Umno website had recently posted a letter allegedly issued by the Terengganu forestry department on Nov 7, 2001 to Harum Elit Holdings Sdn Bhd, in relation to logging activities in Hulu Terengganu.

The letter posted contains handwritten amendments made by one 'Datuk Azman Abdullah', who also signed a note stating that a meeting with Terengganu Menteri Besar Abdul Hadi Awang and Mustafa could be arranged for interested parties.

This further said the offer letter could be issued immediately.

'Letter misused'

Responding, Mustafa said: "It must be a forged document. We have never made any offer to the company. I was told that the department issued letters to short-listed companies to make their presentation and these letters had been abused, misused and forged by irresponsible people looking for quick money."

He said the state government could not be held responsible for such illegal actions and that those who were duped should have referred the letter to the department before parting with their money.

"This is why we have adopted an open-tender system. The process is kept as transparent as possible in order to prevent any hanky-panky in dealings," Mustafa told malaysiakini today.

He also refuted allegations that illegal logging had been carried out in Tembar and Petuang - in northwest Terengganu - where 15,661ha of land had been earmarked to build the state's second hydroelectric dam.

He explained that, since timber is among the money-spinners for the state's coffers, any decision on logging is first referred to relevant authorities including the forestry and environment departments for their approval. This was done for the area in question.

"(Following complaints) enforcement officers from the environment and forestry departments inspected the site and confirmed that everything was in compliance with regulations and that the rivers were free from pollution," he said.

"Believe me if we had done something wrong, I'm sure they would have come down hard on us. The proof that our policies and decisions in the logging activities are effective and sustainable lies in the fact that, in March, we received the ISO 9002 award for best forest management."

TNB project

There are also accusations that the logging is going ahead despite that the dam project had been cancelled.

Tenaga Nasional Bhd (TNB) had purportedly proposed the dam some years ago, although its chief Awang Adek had recently denied the existence of the project.

Mustafa dismissed this as mere "political talk", adding that the state continued with the process of awarding the tender for timber extraction, after former TNB head, Jamaluddin Jarjis (now Finance Minister II) confirmed the national utility board's interest in building the dam last year.

"We met last year. I asked him if TNB was still interested in building the dam. He assured me that TNB was still interested," Mustafa said.

"I told him that, if TNB was no longer interested, then we would offer the project to some other private company. But he insisted... you can ask him about this yourself."

However, Mustafa conceded that there was no written agreement, since the project is scheduled to begin only in about five or six years' time.

"There was only a verbal agreement. We discussed (it) and he gave his word as a gentleman... to date, I am holding to that. This is why I still consider TNB to be interested. But if they tell us otherwise in black and white, we will have no problem in consulting other companies," he said.

Dwindling state coffers

Mustafa said the then Barisan Nasional state government had earmarked the area in 1998 after TNB had conducted a feasible study favouring a second dam.

"When we took over (the state in 1999), we decided to offer a tender to extract logs on the earmarked area. The process was conducted by a special committee that deals in awarding the tender," Mustafa said.

He said the PAS state government was quick to act on the issue as it did not want to make the same mistake as its predecessor, whose "slow actions had caused the loss of millions of ringgit worth of timber".

The Terengganu state government is hard pressed to raise money after the federal government suspended oil royalties payment to the PAS-led administration - estimated to be around RM1 billion annually, or 70 percent of the state's budget.

Logging in Kenyir dam

Mustafa also denied recent press reports that quoted a Umno Terengganu official as alleging there was uncontrolled extraction of timber in the catchment areas surrounding the Kenyir hydroelectric dam ( photo ).

The reports generally claimed that this had damaged the environment in the surrounding forest reserve, showing aerial photographs of stripped land.

Mustafa, however, said these were "wild allegations" that have yet to be substantiated with proof.

"They simply want to make us look bad. If there is proof, I am sure action would be taken against us in next to no time," he added.

On Aug 5, Prime Minister Dr Mahathir Mohamad had taken a swipe at PAS for its logging practices in Kelantan and Terengganu, as he fielded questions on whether he would order an investigation into a logging scandal involving Umno Pahang.