PKR investment and trade bureau chief Wong Chen today claimed that close to RM100 million will be slashed from the pockets of Felda settlers' following the listing of Felda Global Venture Holdings.

"In 2011, Felda spent RM424 million on settlers, however, for 2012, Felda intends to spend only RM326 million on settlers, a massive reduction of close to RM100 million," he told a press conference at the PKR headquarters in Petaling Jaya today.

There will be a 25 percent cut to the Hari Raya incentive from RM40 million to RM30 million and insurance from RM20 million, will fall to RM15 million for Felda settlers.

NONE But the steepest cut will be to the settlers' infrastructure facility which was slashed by a whopping 56.52 percent from RM115 million to RM50 million.

 Wong Chen ( left ) said this follows a fall in Felda's earnings as it has been reduced to a mere "landlord" rather than a lucrative plantation operator, after handing over 350,000ha of land to FGVH.

This, he said, is seen in Felda's earnings where it expects to take in a mere RM900 million this year compared to last year's RM2.5 billion, a 64 percent reduction.

"Now all they do is collect rental for the land, but the oil palm product is surrendered to FGVH," he said.

The RM900 million, he added, is the expected benchmark for future earnings in a post-listing era and thus welfare benefits of the settlers are expected to hover around this new rate.

This information, he said, is based on Felda's 2012 budget obtained by the party which has taken into account FGVH's listing on Bursa Malaysia which is expected to take place on June 28.

Less bonus incentive 

Among other areas affected by the cut is the 'bonus incentive for settlers' productivity' which drops 22.33 percent from RM103 million last year, to RM80 million.

Allocation for settlers on 'education and higher learning programmes' saw a reduction from RM10 million to RM7 million, while 'youth institutions' development' was slashed from RM35 million to RM30 million.

The total reduction brought this year's budget to RM326 million from last year's RM424,068,422, a sharp drop from the conventional RM400 million to RM500 million spent on settlers welfare every year, said Wong Chen.

While admitting that FGVH's initial public offering has been managed well, Wong Chen stressed that the purpose of Felda was to provide welfare to settlers.

"Felda wasn't intended to rake in profit for the government... the settlers may have received small one-off payouts but their welfare is being cut (in the long run)," he said.