Khalid Ibrahim remains in charge of Selangor

May 31, 2010

www.themalaysianinsider.com

Tan Sri Khalid Ibrahim remains in charge of Selangor

By Neville Spykerman

The PKR leadership has saved Tan Sri Khalid Ibrahim’s job despite severe internal criticism over a sand-mining scandal that has marred the party’s integrity and Selangor’s financial performance.

Delegates at the party’s sixth annual congress in Kota Baru over the weekend tore at the Selangor Mentri Besar, suggesting he should make way for someone else to manage and defend the country’s most-industrialised state in the next general election.

But PKR de facto leader Datuk Seri Anwar Ibrahim and his wife, party president Datuk Seri Dr Wan Azizah Wan Ismail, stoutly defended the former corporate chief by saying some matters were beyond his control.

“If someone asks me how to evaluate the performance of Tan Sri Khalid or Pakatan Rakyat (PR), what we will say is that the first thing that we promised is a clean and transparent government. With that, we defend that Khalid has been successful,” Anwar said yesterday when closing the PKR annual congress.

But detractors say it was not clean in the lucrative but illegal sand-mining industry, and that this has tarnished the PR administration and was reportedly costing the state government some RM728,000 a month.

Over 30 illegal mines are believed to be extracting sand every month and the state seemed powerless to stop them.

The Khalid administration set up Kumpulan Semesta Sdn Bhd (KSSB) in September 2008, soon after PR took over Selangor, to put stop to illegal sand-mining in the state by extracting 75 million tonnes of sand annually, or over six million tonnes a month. But the state-owned sand-mining subsidiary was not the silver bullet Khalid had imagined it would be.

Under KSSB, which was the sole licensed concessionaire for sand-mining on land owned by the state and its subsidiaries, Selangor was forecast to generate between RM100 million and RM300 million annually.

The Selangor Mentri Besar had announced that all proceeds from KSSB would be channelled to state welfare programmes.

However, state officials have admitted to The Malaysian Insider that the calculations in the forecast were grossly wrong.

Under Datuk Seri Dr Khir Toyo’s administration in 2007, the state earned RM17 million but believed it should have been receiving well over RM100 million in royalties.

KSSB’s profits were also forecast based on demand for sand that year. But in the four months after KSSB was established in September 2008, the state only earned RM1.99 million. For the whole of 2009, KSSB received RM9.40 million, and RM1.11 million between January and March this year.

Officially, the discrepancy has been attributed to poor demand because of the economic downturn. But at the same time, KSSB has been plagued with claims of corruption and mismanagement.While acknowledging there are problems, state officials said it was overly simplistic to solely blame the state subsidiary.

“Illegal sand-mining occurs throughout the country and was prevalent long before PR assumed the helm in Selangor,” said an official who spoke on condition of anonymity.

Sand-mining concessions were also frequently a form of largesse for the “politically connected.” In Selangor, KSSB’s “control” of sand-mining was regarded as a hindrance to the old system of political patronage.

It is understood that Khalid was under fire both from those who no longer enjoy this source of easy revenue as well as those within PR who expect to be “rewarded”. At the same time, the old problems of under-declaration of sand being mined and under-payment of royalties have not been solved.

While KSSB was established to overcome and streamline all sand-mining activities in the state, enforcement still falls under the jurisdiction of local, state and federal authorities. KSSB may have been a noble intention on the part of Khalid, but the state subsidiary’s failures are an Achilles’ heel to his administration.