|Laman Webantu KM2A1: 2727 File Size: 3.3 Kb *|
Fwd: AFP Malaysia takes control of multi-million paymts toopposition state
6/9/2000 9:45 pm Wed
Tuesday, September 5
Malaysia takes control of multi-million payments to
KUALA LUMPUR, Sept 5 (AFP) -
The Malaysian government said Tuesday it was taking control over
payments worth tens of millions of dollars which previously went directly
to an opposition-ruled state.
The state government in northeastern Terengganu says it is entitled to
the annual payment as royalties on offshore oil production.
But in June Prime Minister Mahathir Mohamad said the goverment was
studying whether Terengganu was entitled to royalties.
This year's payment would be worth an estimated 810 million
ringgitmillion dollars), almost twice as much as last year following a rise
in world oil prices.
The Parti Islam SeMalaysia (PAS) won control of the state assembly from
Mahathir's coalition in elections last November.
The finance ministry described the payments made since 1978 to the
state as "goodwill contributions."
It said in a statement the payments would still be made but did not
specify whether they would equal five percent of the value of the state's
oil and gas production, as was the case previously.
The ministry said a new central committee, headed by the treasury
secretary-general, was finalising the allocation mechanism.
The funds will be largely targetted at infrastructure development in rural
areas, cheap housing for the poor, religious schools and loans for
fishermen, it said.
"The committee will prepare and determine the list of projects, the criteria
for the choice of projects and the schedule of implementation for the
federal government's consideration," it said.
"The federal government is confident that this new method will benefit the
people of Terengganu who need assistance."
The finance ministry said the government made "goodwill contribution" to
Terengganu since 1978 through national oil company Petronas. The
state was now no longer poor as a result of the development programs.
It said accountability was factored into the new payment method, as the
federal government was not confident that the PAS-led state authority
would cooperate to protect the interests of Terengganu residents.
The finance ministry said the state government received a "goodwill
payment" of 432 million ringgit (114 million dollars) in February but had
given no information to the federal government on how the money was
The federal government promised to consider any additional needs that
may crop up in the future, the ministry added.
A government official told AFX-Asia, the financial news agency
subsidiary of AFP, that the allocation to Terengganu used to be known
as "oil royalty" but should be called a "goodwill contribution."
He said that it was later found that Terenganu is not eligible for oil
"Under the land code, what is deemed as (due to) Terengganu is what is (found) on the land up to three nautical miles offshore, but the oil is found beyond three nautical miles," he said.