Umno veteran Tengku Razaleigh Hamzah has insisted that Kelantan is entitled to a five per cent royalty for oil extracted off its waters, saying it was time to “re-examine the relationship between the states and the federal government”. The Gua Musang MP told a packed Stadium Sultan Mohamed IV last night that national oil firm Petronas was bound by law to give the money to states where oil is found, adding Kelantan was not interested in compassionate payments. “Kelantan may be poor. But we are not beggars. We demand what is rightfully ours,” the Kelantan prince said to cheers and cries of “Allahu Akbar (God is great)” at the last night’s gathering organised by the state government over the oil royalty issue.
The PAS government had demanded the oil royalty payment from Petronas last year, after the Statistics Department revealed that Kelantan, together with Sabah and Terengganu, had contributed 62.5 per cent of the oil extracted in Malaysia. The Barisan Nasional-ruled federal government has insisted oil from the joint development area with Thailand was not from part of Kelantan’s waters and has only offered RM20 million as “compassionate payment”. But Razaleigh, the founding chairman of Petronas, disagreed with the government’s move, saying the formula for oil royalty was first agreed with Sarawak and later extended to all states.
“If Sarawak is due her five per cent royalty, no less is Kelantan, by the same principle,” thundered the Umno politician popularly known as Ku Li. Razaleigh said he has received the blessings of the Kelantan palace to speak on the issue and also confirmed that he will lead a parliamentary caucus to press the ruling coalition Barisan Nasional to honour the Petronas agreement. “The oil caucus I will lead is not just about oil. It is to re-examine the relationship between the states and the federal government,” he told the crowd, adding the larger issue here was state rights as Malaysia was a federation of sovereign states that have assigned only certain rights to the federal government.
“Let us re-examine the terms of the Federation Agreement signed in 1948,” Razaleigh added, referring to the founding of Malaya before it gained independence from Great Britain in 1957. He repeated his earlier argument that Putrajaya should respect the agreements made and not change them depending on who ruled the states, saying “How are we to ask investors to have confidence in us if we can’t even keep contracts between ourselves!” The move has a precedent in Terengganu after the 1999 general elections, when PAS won the state, prompting the federal government to convert oil royalty payments to compassionate payments managed by a federal department. Terengganu had sued for its right and Putrajaya relented only after Barisan Nasional recaptured the state.
Ku Li, who noted to the crowd that he was entering the stadium after 15 years, was earlier escorted in by a convoy of 50 trishaws. Among those sharing the stage with him were Kelantan state executive councillors, led by Mentri Besar Datuk Nik Aziz Nik Mat. The approximately 50,000 crowd cheered and clapped when Razaleigh began his speech with “I stand here representing only myself. I am here upon principle.” The former finance minister and one-time Umno vice-president, who had unsuccessfully challenged Prime Minister Datuk Seri Najib Razak for the Umno presidency, had no kind words for his party during the speech and later when speaking to reporters.
He described Kelantan Umno chief Datuk Seri Mustapa Mohamed, also International Trade and Industry Minister, as a sycophant, and party-owned newspaper Utusan Malaysia as reporting fiction. “Don’t mention those names to me. Mustapa is a sycophant, Utusan is just [reporting] myths,” he retorted. Razaleigh has, in recent months, taken a strident stand against his party, particularly over the oil royalty issue and the larger issues of governance in Malaysia. He had earlier written in his weblog (razaleigh.com) that by ignoring both the letter and the spirit of agreements over oil found in Malaysia, the federal government sets aside the very purpose of Petronas. “More importantly there is a failure to understand the origin of federal powers over state resources.
“We have forgotten that the states existed prior to the Federation. The Federation only exists because the states were willing to vest their rights in it, such as their rights in oil. Not the other way around,” he wrote. Razaleigh noted the federation itself rested on the principle of fairness to all the states, and to its citizens, wherever they may live. “When the government of the day ignores this principle, it is ignoring a basic principle holding our country together. “There has been too much centralisation of power in the federal government. Powers functions and rights that belong to the states must be restored to them,” the Gua Musang Umno chief said.
Tengku Razaleigh Hamzah interview as Petronas Chairman part 1
part 2
part 3
part 4
The 'go go years' are over and our 'oil lottery' money is fast depleting mainly due to mismanagement by the powers-that-be, decried veteran politician Tengku Razaleigh Hamzah, According to the Petronas founder, the original plans of the oil giant did not include over-producing oil to pay for billions of ringgit worth of unnecessary government projects. "It started with this (defence equipment purchase) agreement with (then British prime minister) Margaret Thatcher, and suddenly the production of oil was doubled from 650,000 barrels per day to over a million barrels a day (to fund the purchase). That was too much for us," he said.
As one of the architects of the Malaysia oil blueprint, the Kelantan royal is now out to set things right, especially for his home state which he believes have the "sovereign right" to be paid royalty for oil found on its shores.
"It's not a complicated issue for as long as oil is found along the shore of Kelantan, whether it's in the joint development area or whether it is off-shore in the exclusive economic zone of the country, Petronas is obliged to pay," he said. Another matter which needs to be address is the arrangement between the states and the centre, which Razaleigh said is outdated and cannot provide the revenue required to meet the development plans of each state. The former finance minister, who met with Malaysiakini last week, was unfazed by the warning from Deputy Prime Minister Muhyiddin Yassin not to accept an opposition invitation to head a parliamentary oil royalty caucus.
Razaleigh said Muhyiddin can "climb to the top of the mountain" to warn him but it would not stop him from doing what is right. " I don't care who warns me. I'm doing this for the country; I'm not beholden to anybody. People can climb to the top of a mountain to warn me. I couldn't care less. I plan to see that the sovereign rights of the people are protected. The following are excerpts of the interview. Content has been edited for brevity.
Malaysiakini: You gave a stinging speech arguing that Malaysia has "squandered" quite a lot of our oil money. What prompted you to give that speech?
Razaleigh: It's because we will get caught flat-footed. What happens if the oil runs out? We have not planned to have substitute revenue in the event that we ran out of oil revenue in the years to come. Some economists have put the amount of money already lost (due to mismanagement of oil revenue) at about RM100 billion... some estimated about RM350 billion, while others put it as RM500 billion. I can't put my finger on the numbers precisely because I don't have access to the accounts. But Dr Mahathir (Mohamad) has said something to the extent that there are some huge sums of money unaccounted for... missing...
Malaysiakini: Was this in reference to the RM270 billion of oil revenue which Mahathir alleges to have been spent during the previous prime minister Abdullah Badawi's term?
Razaleigh: I can't quite remember... but he did come up with the statement querying Petronas, asking, 'where has this money gone to?' The amount I referred to in my speech, (was the amount spent during the) time when (Mahathir) was in control of the company and Petronas. The amount that was utilised for all sorts of expenditure, including defence equipment which was purchased from Britain, for instance, amounted to RM7 billion. This was the defence purchase made with (former British prime minister) Margaret Thatcher at that time after (Mahathir and Thatcher) patched up. This was after Mahathir threatened to 'buy British last'. Forward contracts were being made to satisfy these purchases.
KUALA LUMPUR, Sept 27 — Tengku Razaleigh Hamzah said today he will contest the Umno presidency even if Prime Minister Datuk Seri Abdullah Ahmad Badawi decides against defending his post. He also spoke out against the postponement of the party polls, and urged members to push for the reinstatement of December as the date of the annual general assembly.
Tengku Razaleigh also called on Umno grassroots to reject the latest transition of power plan involving Abdullah and party deputy president Datuk Seri Najib Razak. "I reject this transition of power because it is extra-constitutional," the veteran Umno member told reporters at his home here. He criticised the transition plan for being unethical as "it is not stated within the party's constitution".
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