Previously classified ministry 'red files' have revealed more shocking information about contracts that have put the government at a disadvantage, said Finance Minister Lim Guan Eng.

In an interview with Sinar Harian today, Lim said these contracts had unusual clauses that were not favourable to the government.

“There were several contracts where payments were made even though work had only been completed 10 to 15 percent.

“But nearly two-thirds of the contract value or total of the contracts had been paid,” he was reported as saying.

“We are investigating these contracts that are pretty unusual. Normally when a job is 30 percent complete, we would only pay 30 percent. But this has not been adhered to.

“The job is 30 percent complete, but they have paid 70 percent. Why?

“Because the contracts were made based on periodic payments, that is (for example), a payment every six months, regardless of whether work has been done or not,” he said.

However, he did not reveal what the contracts were for, or who the contractors were.

Lim lamented since the contracts have already been signed, there is little the government can do about the deals themselves, but they will probe those behind the decisions.

“We will investigate and ask why they have drawn such contracts that are not in the country's best interests. That is what we need to investigate,” he told Sinar.

1MDB 'did not pay a sen'

In the interview, Lim recounted how the 'red files' had been previously off limits to Finance Ministry officials, and the shock he received upon studying them.

“The red files were before this marked secret, but have now been opened. I was very shocked because the files contained many scandals, including the (ministry's) payment of debts for 1MDB.

“It appears 1MDB's debts before this had been paid by the government. Whereas 1MDB had before this claimed they paid the debts themselves.

"They haven't paid even a single sen of their debts,” he told the Malay daily.

Repeating how the files show the Finance Ministry had paid RM7 billion of 1MDB's debts, he stressed this did not include interest on the debts, which illustrates the magnitude of the loss of the people's money due to 1MDB's debts.

“Imagine if this money was invested and used for the people. Wouldn't we have been able to solve a lot of our problems?

“But instead, the 1MDB scandal has negatively impacted our economy,” he said.