Rosmah trial: Hybrid project wasn’t needed, says senior Treasury official

Treasury deputy secretary-general Datuk Othman Semail is pictured at the Kuala Lumpur High Court on February 20, 2020. — Picture by Hari Anggara
Treasury deputy secretary-general Datuk Othman Semail is pictured at the Kuala Lumpur High Court on February 20, 2020. — Picture by Hari Anggara

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KUALA LUMPUR, Feb 20 — There was no need for a billion ringgit solar hybrid project in Sarawak as the existing electricity supply to schools was already sufficient, the High Court heard today.

Testifying in Datin Seri Rosmah Mansor’s corruption trial, Treasury deputy secretary-general Datuk Othman Semail said until he received word of a proposed RM1.25 billion solar hybrid project to supply electricity to rural schools in Sarawak, no one had complained about the existing supply of electricity.

Othman said the Treasury rarely approves contracts of such high cost and if it does, it needed to vet the company bidding for the project thoroughly. Upon doing so for Jepak Holdings Sdn Bhd, Othman said he found it to not have a sound development and financial plan.

Hence, he had sent several strongly worded memos questioning the legitimacy of Jepak Holdings and its ability to handle the scope of the project, he added.

Othman also told the High Court that instead of sharing the load with other companies, Jepak Holdings had demanded that the entire contract be handed to it, meaning the company wanted to be the sole supplier of electricity to the 369 rural schools in Sarawak for the duration of five years.

During questioning by Rosmah's lawyer, Datuk Akberdin Abdul Kader, Othman explained his decision to reject Jepak Holdings despite the accompanying recommendations from then prime minister, Datuk Seri Najib Razak, who had asked the Treasury and Ministry of Education (MoE) to release a Letter Of Award (LOA) to Jepak Holdings, therefore granting them with the contract.

Akberdin: Why did you express your reservations despite the minutes from the PM suggesting you support Jepak Holdings’ proposal?

Othman: There were suggestions that using these hybrid solar panels would be revolutionary and forward thinking and had long-term benefits. However, there were no studies to suggest this was true. More importantly, at the time, there were no complaints from anyone that the existing Gensat diesel project was problematic, so I felt there was no reason to approve such a high-costing project, bearing in mind the state of the economy and a lack of funds from the Finance Ministry.

Akberdin: So even though the minister (finance minister Datuk Seri Najib Razak) said approve the project and grant Jepak the LOA, you still disapproved?

Othman: What my department does is vet and advise the decision makers on what they should do. We felt this solar project which was being done by direct negotiations for RM1.25 billion should not have been considered.

Akberdin: That's a very bold decision.

Othman: It wasn't mine alone.

Othman added that after the Treasury did its due diligence in assessing Jepak Holdings’ paperwork, it came up with two options. Option one was to not approve the solar hybrid project, while option two was for Jepak Holdings to carry out a pilot project for 16 schools in the Mukah and Daro districts and 12 schools in the Baram district.

He then explained to the High Court that he had no issues with granting a project to Jepak Holdings if it had a proper financial plan in place. Instead, what he got was unacceptable and he was duty bound to reject the company’s application.

Throughout the trial, Rosmah's lawyers have been trying to shift the blame to government officers in the MoE for approving the LOA, as well as for not doing their due diligence in determining if correspondence to and from the Prime Minister’s Office was legitimate.

Former MoE secretary-general Tan Sri Madinah Mohamad was accused of having a vested interest in the solar hybrid project by the defence.

The defence had suggested this was the reason why Madinah had sent a letter to the Finance Ministry on September 2, 2016, which coincided with her last day at work before retiring, requesting that it release the LOA to Jepak Holdings.

Akberdin: Did you know Madinah's last day was September 2, 2016?

Othman: No. I knew she was retiring but didn't know when.

Akberdin: If you look at the letters she sent, she asked for the LOA to be released and additional funds for the project despite there being no proper financial plan and the price negotiations were not done right? I mean how can you buy something without knowing its price, am I right?

Othman: Yes, correct.

Akberdin: So you agree this is a breach of the rules?

Othman: Well, she didn't release the LOA. She just asked to look into it.

Akberdin: Okay, but she should've checked the price first or set a price first, isn't it?

Othman: By right, that should be the way.

Rosmah's trial resumes on March 9.

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