PKR’s Rafizi Ramli has questioned why warning bells did not go off for the government when it decided to accord a private green technology company a RM100 million grant, as the latter had trouble obtaining financial loans from banks in the first place.

In a statement, the party’s director of strategy alleged that the company, involved in renewable energy using steam, had stated in a letter to the Prime Minister’s Department in November that it was unable to obtain support from financial institutions.

"This should have immediately raised concern on the part of (Prime Minister Najib (Abdul Razak) and the government.

"A commercial project that does not pass the screening by financial institutions (and as such, finds it hard to obtain loans) reflects poor cash flow and financial standing,” he said in a statement today.

Rafizi had yesterday alleged that documents obtained by PKR showed Science, Technology and Innovation Minister Ewon Ebin ( left ) had approved government funds to the Pahang-based company in January after a personal referral from Najib.

In a follow-up to yesterday's whistleblower-sourced disclosure of the secretive grant approval process, Rafizi today produced two more letters.

 

In the first letter (dated Nov 15, 2013) the Pahang-based company wrote to the premier, arguing why it should get the R&D grant. The letter noted that it "could not get bank loans" to back its plant, even though it was confident that the plant would employ hundreds and draw other investments.

 

Perhaps the banks didn't want to back the company's plants as the technology was neither unique to Malaysia nor very new,  Rafizi said.

 

He said that Malaysia's Petronas already has a similar plant that could turn woodchips into natural gas in order to power a steam boiler.

 

Woodchip-generated steam

According to the letter, the company had pumped in RM130 million for what it called a "premier renewable energy based on sustainable woodchip biomass" plant in Kerteh to support a Korean and French specialty chemicals company which were investing RM2 billion in biotechnology.

 

The company had contracted to sell at least 1.19 million tonnes of woodchip-generated steam at RM55/tonne for 10 years.

 

Rafizi said the PM has to answer why R&D grants, which usually do not obligate the receiver to pay any money back, were handed out freely to a commercial venture.

 

Rafizi had said that Mosti gave out over RM1.15 billion from 2009-2013, which resulted in only 20 commercial ventures.

 

The second letter disclosed by Rafizi today was a letter from the PM's office forwarding the company's appeal for funds directly to Mosti Minister Ewon Ebin, dated Nov 21, 2013.  

On it,  Najib had allegedly scribbled a note of recommendation to the minister: "For your consideration. I have no objections if this project is suitable."

 

Rafizi said the onus is now on the prime minister to come clean and explain the deal.

 

"Najib can't keep running away from questionable deals like this - or just join anti-corruption marathons - he needs to give an explanation because I still have more documents to disclose," Rafizi told reporters at PKR HQ.