PKR’s load of bull

In PKR’s original allegation, they characterised NLMC as only handling marketing, hence queried why that would require such a large sum of money. I have explained previously and once again here that NLMC’s involvement spans the entire supply chain from processing to marketing. Another allegation explained away by fact and reason.

By Khairy Jamaluddin, The Malaysian Insider

Over the past couple of days the PKR machinery has gone into overdrive to paint a picture of power abuse surrounding the National Feedlot Corporation (NFC). 

I have systematically engaged, both in Parliament and through my blog, many of the accusations and insinuations. I took care to be clear and detailed about why this picture the likes of YB Saifuddin Nasution and PKR director of strategy, Rafizi Ramli, are keen to paint does not stand the test of scrutiny.

Through a comprehensive examination of the facts, each allegation has been conclusively rebutted and exposed as founded on a fatal combination of shoddy mathematics, cherry-picked figures and outright lies. I will subject Rafizi’s latest attempt to flog the dead horse to the same process below.

Something that has become terribly clear to me is that throughout this debate, Rafizi has shown himself to be disingenuous, dishonest and in the habit of shifting the goalposts the very moment he realises a line of attack is broken down. Let me explain why.

First, he alleged that NFC was given 5,000 acres of land in Gemas, Negeri Sembilan, for free. As I have stated, this is categorically false — NFC was only offered 1,500 acres on lease by the Negeri Sembilan Menteri Besar Incorporated.

Two major errors: On the acreage of the land in question and the fact that it is on lease, not handed out for free. You will notice that he makes no mention of this in his Malaysiakini piece on November 10, although there is still the November 1 blog entry with the words “1 lembu = 5 ekar”. Great math.

Secondly, he was also absolutely caught out on the allegation that — and I quote him here — “the (NFC) beef is only being supplied to luxurious restaurant chains owned by Shahrizat’s family called Meatworks, Senor Santos and Brawns in Singapore”. More about where NFC beef is supplied to later. But for the moment, I reiterate what I have said repeatedly: NFC simply could not have supplied meat to Senor Santos and Brawns because the Singapore government prohibits the import of raw beef from Peninsular Malaysia due to fear of foot and mouth disease.

When I directed this to his attention on Twitter, Rafizi, perhaps excitably, sought to correct me by posting a link to the Singaporean Agri-food and Veterinary Authority website purportedly showing that Malaysia is amongst the countries approved to export beef to the Republic.

What he failed to do — and I suspect this was more out of incompetence more than anything else — was to scroll down to the footnote on the list, which clearly shows that Malaysia may only export processed, and not raw meat, which relates to NFC. Again, you will not see this allegation in his more recent remarks.

Incidentally, in his desperation he did try to deny ever saying NFC sold beef to the restaurants in Singapore. (This was his tweet on November 8: “I nvr said NFC sold its raw meat 2 Senor Santos/Brawn in Singapore”). You would’ve thought a Strategy Director knows that direct quotes are quite easily searchable on the Internet. He was unceremoniously exposed as a liar within minutes. That jig, too, was up.

He then quickly shifted to the question of the RM250 million government loan to NFC. On this matter, he was wrong to say that all RM250 million had been spent or disbursed; to date, the total drawdown available for use by NFC is RM181 million, consistent with the reply given by the prime minister, the minister of Agriculture and Agro-based Industries, and verified by the Auditor-General’s report.

The remainder of the loan is still in the Special Loan Account (SLA) in which the loan was placed initially or put into fix deposit instruments in order to gain returns while waiting for further operational drawdowns from NFC. I have written about this process extensively on my blog.

Rafizi then tried to kick up a storm over the disbursement of the RM81.2 million to a related company of NFC, the National Livestock & Meat Corporation Sdn Bhd (NLMC). But there is no fuss to be made. Such disbursements are reasonable, considering that NLMC is tasked to operate the abattoir, develop the supply chain and market for NFC’s products, as well as purchase cattle from satellite farms. This ties in with the feedlot project’s broad overall goals, spanning from infrastructure, processing to distribution and marketing.

In PKR’s original allegation, they characterised NLMC as only handling marketing, hence queried why that would require such a large sum of money. I have explained previously and once again here that NLMC’s involvement spans the entire supply chain from processing to marketing. Another allegation explained away by fact and reason.

Shifting his sights to another NFC sister company, the Real Food Company (RFC), Rafizi questioned why RFC was given pricing discounts totalling RM3 million — insidiously employing the term “subsidy” for a particular effect.

I provided a straightforward explanation for that discount in my earlier blog entry. RFC is the sole distributor of NFC meat; the discount allowed the final product to be sold to wholesalers, wet markets and hypermarkets at competitive prices, which most will recognise as a fairly common aspect of any market entry strategy — the discount was not given to engineer a larger profit margin for RFC but rather passed through to retailers and consumers. When demand is established and economies of scale attained, prices can be normalised. And in any case, is it not the consumers who ultimately benefits through that discount? Where’s the beef?

But of course, Rafizi only banged on this just so he could link it to his earlier remark about NFC supplying only to luxurious restaurants owned by the minister’s family. In his recent article, he wrote, “NFC was entitled to subsidise the operations of Meatworks through a scheme that cost taxpayers nearly RM3 million in 2009”. (Note again the conspicuous absence of the two restaurants in Singapore after being exposed on that allegation).

This is another lie, because alongside the likes of Carrefour, Giant and numerous wet markets, NFC beef is also supplied to restaurants like Jake’s Charbroil Steak, Tony Roma’s, Dome Café, Smokin Salma and Jarrod & Rawlins — all of which enjoy the benefits of the discount as Meatworks does.

Sure, these are up-market establishments, but premium meat accounts for only five percent of a cow carcass anyway. Most of the rest of the cow are sold in hypermarkets and wet markets and also enjoy this discount that Rafizi so desperately wants to link only to Meatworks. So this talk of “a subsidy for the elites who have expensive taste buds” is absolute nonsense on multiple levels.

Having been proven wrong on every single point despite jumping around from one baseless accusation to another, Rafizi’s final throw of the dice was to press on over this same issue of disbursements and discounts, but without at all challenging the reasons I offered.

Running out of arguments that he can cook up, he accused me of saying that the SLA was an “escrow account but not an escrow account” — even managing to slip in a comment about how he “had spent many years as a chartered accountant and an auditor”.

I’m not too sure how much good those years did him in terms of understanding the simplest of analogies — we already know from above they didn’t help much in building meticulousness or attention to detail.

I never said the SLA was an escrow account — it is what it is, a Special Loan Account; not an escrow account. In my press conference on November 9, I merely drew a comparison to an escrow account to illustrate the strict processes involved in any drawdown from the SLA, which requires approval from several parties, in this case both the Ministry of Agriculture and the Ministry of Finance.

Sure, there is no independent third party disbursing money as per an escrow account, but the principle I was establishing is that monies in the SLA cannot be freely accessed by NFC without the approval of two government ministries. Surely that reference to the principles of trust and accountability also found in an escrow arrangement is not too difficult to comprehend?

Despite his lies, deceit and incompetence, Rafizi is right about one thing: “It’s not about the cows”. It is about his and PKR’s politicisation of the NFC issue, simply because it is linked to a minister’s family.

Make no bones about it, I fully expect the opposition to play a role in pursuing the truth, especially when there is suspicion of wrongdoing. But once facts are provided that do not support that suspicion, the honourable thing is not to demand for the minister’s resignation, but to accept that you are wrong and move on.

By the way, Rafizi closed his latest article by saying that this debate “is not about technicalities”. I disagree. In many ways, it is precisely about technicalities, details and facts — only through rigorous examination and reasoned argument can one decide whether to make the charge of abuse of power. But perhaps you can tell that someone is out of his depth when he relents — no longer wanting to engage you on facts and details, appealing instead to unsubstantiated sentiment.

p.s. You’re probably wondering where the explanation for the condominium purchase is since that’s the latest salvo from PKR. Admittedly it’s a great issue to spin. It is easily distilled to a sensational punch line: “Feedlot uses government money to buy luxury condo”. People who are prejudiced will be attracted to PKR’s cheap shot without wanting to hear an explanation.

Anyway, the explanation is provided for below. It is in Bahasa Malaysia and separate from my reply to Rafizi above for reasons of consistency. Rafizi’s last article, which the above is a response to, first appeared in English and did not refer to the apartment purchase. Hence my reply above is in English and excludes an explanation for that.

The apartment purchase was raised by YB Saifuddin Nasution in a press conference at Parliament yesterday. So, to be consistent, I have responded to that in Bahasa Malaysia as below.

Isu apartmen dan projek NFC

PKR sekali lagi telah membuat tuduhan tidak berasas untuk memesong rakyat berhubung isu National Feedlot Corporation (NFC). Semalam mereka cuba memesongkan rakyat dengan tuduhan penyelewangan dana bagi membeli apartment One Menerung, Bangsar yang dikatakan hak milik keluarga Menteri Keluarga, Wanita dan Masyarakat. Perkara ini mudah disensasikan kerana jika dilihat sepintas lalu pasti ramai akan tanya apa kaitan projek NFC dengan pelaburan hartanah?

PKR mungkin rasa teruja dengan hujah mereka tapi saya ingin tegaskan bahawa tuduhan tersebut jauh terpesong, bak jauh panggang dari api.

Mengikut kajian saya, memang benar National Livestock & Meat Corporation (NLMC) telah membeli apartment One Menerung di Bangsar. Pelaburan ini dibuat dengan dana yang telah disalurkan kepada NFC dari akaun pinjaman khas (SLA) yang dikawal selia oleh Kementerian Kewangan dan juga Kementerian Pertanian dan Industri Asas Tani. Daripada sumber ini, NFC telah memindah sebanyak RM81.2 juta kepada NLMC.

Antara tugas dan skop kerja NLMC ialah proses operasi penyembelihan, boning atau proses pengasingan daging dan tulang, pembungkusan serta penghantaran disamping berperanan membeli hasil daripada ladang-ladang satelit apabila ladang-ladang ini beroperasi.

Dalam tuduhan asal, PKR sebut NLMC ini cuma membuat kerja pemasaran bagi NFC. Jelas disini tuduhan itu tidak berasas memandangkan skop menyeluruh yang diberi kepada NLMC yang memerlukan perbelanjaan operasi yang besar. Sebab itu, NLMC diperuntukkan RM81.2 juta untuk menampung kos operasi.

Malangnya, projek NFC telah mengalami kelewatan operasi. Kelewatan operasi ini tidak disebabkan oleh pengurusan NFC. Antara sebab kelewatan ini sepertimana dijelaskan oleh YB Menteri Pertanian dan Industri Asas Tani di Parlimen pada 8 November ialah Kerajaan tidak ada peruntukan yang mencukupi untuk membangunkan ladang-ladang satelit.

Apabila ladang-ladang ini tidak dibangunkan sebahagian dari duit yang ada pada NLMC tidak dibelanjakan. Kerajaan juga masih tidak dapat membina pusat penyembelihan yang menepati piawai antarabangsa atau Export Quality Abattoir (EQA) sepertimana perjanjiannya dengan NFC. 

Apabila kelewatan ini berlaku, pihak pengurusan NFC berdepan dengan keputusan penting. Apakah mereka hanya biar duit yang diberi kepada NLMC itu dalam akaun semasa yang tidak memberi pulangan yang besar sambil menunggu ladang-ladang satelit dan EQA dibangunkan atau mereka melabur duit itu dan mendapat pulangan sambil menunggu masalah kelewatan operasi tersebut diatasi?

Kalau dibiar sahaja duit itu dalam akaun semasa, bukan sekadar ia tidak membawa pulangan tetapi dengan iklim ekonomi dunia yang melihat fenomena inflasi atau kenaikkan harga barang, nilai sebenar duit ini mungkin terhakis.

Sebagai contoh mudah, kalau NLMC membeli lembu dari ladang-ladang satelit hari ini, kosnya mungkin lebih murah dari pembelian yang dibuat tahun depan disebabkan kenaikkan harga barang dan komoditi. Jadi apabila semua ini tidak dapat dibeli dan ditangguhkan, sudah menjadi tugas pengurusan untuk memikirkan apa mereka nak buat dengan duit tunai yang ada dalam akaun semasa itu.

Pihak pengurusan telah membuat keputusan bahawa pelaburan yang paling selamat, yang memberi pulangan yang besar, yang boleh dijual apabila duit diperlukan untuk operasi adalah aset hartanah. Sudah pasti mereka telah mencari projek perumahan yang berkualiti tinggi dan popular agar pulangan NLMC dalam bentuk sewa dan juga kenaikkan harga apartment itu lebih besar dari pelaburan lain seperti akaun simpanan tetap. Difahamkan, apartmen berkenaan telahpun disewa dan mula memberi pulangan kepada NLMC. Nilai apartmen tersebut juga telah naik sejak dibeli NLMC.

Mungkin ada yang bertanya, kenapa duit dari SLA yang dikawal selia oleh kerajaan disalurkan kepada NFC sekiranya ada kelewatan operasi? Harus diingat, projek ini dimulakan dalam iklim ekonomi dunia yang tidak menentu. Krisis kewangan dunia telah memberi kesan kepada perbelajaan kerajaan yang disusun semula mengikut keutamaan rakyat.

Saya yakin kerajaan telah meluluskan pengunaan pinjaman dari SLA kepada NFC mengikut perancangan awal tanpa apa-apa kelewatan kepada operasi NFC. Tetapi apabila keadaan ekonomi dunia dan negara menjadi lebih mencabar, adalah menjadi wajar untuk kerajaan menyusun semula keutamaan perbelanjaannya dan inilah yang menyebabkan kelewatan operasi NFC seperti dijelaskan di atas.

Saya rasa walaupun penjelasan diatas amat logik dan munasabah khususnya dari sudut perniagaan di mana pelaburan dibuat sambil menunggu kelewatan projek yang disebabkan faktor di luar kawalan NFC dan NLMC, PKR akan tetap mempolitikkan isu ini dan tidak akan menerima penerangan yang diberi.

Tetapi walau apa pun tohmahan palsu yang diberi oleh PKR, kebenaran alam kes ini sudah terang lagi bersuluh bagi mereka yang tidak prejudis. Dalam kes apartmen One Menerung, pengurusan NFC dan NLMC telah membuat keputusan untuk melabur duit yang masih tidak dapat diguna disebabkan kelewatan operasi supaya mendapat pulangan.

Hujahnya mudah dan jelas.

* Khairy Jamaluddin is Umno Youth chief and the MP for Rembau