Terengganu say 'No' to low offer of RM1.7b oil royalty

'No' to low offer of RM1.7b oil royalty

NST Online - 2009/12/24


THE Terengganu government has turned down an offer of RM1.686 billion in oil royalty payment from the Federal Government as the state administration insists it has the right to a higher amount.

Menteri Besar Datuk Ahmad Said said the quantum the state government believed it deserved to be paid is RM2.79 billion, the balance of the funds the Federal Government spent on various projects using Terengganu oil royalties between 2000 and this year.

He said the offer was made by the Finance Ministry at their last meeting on petroleum royalty issue chaired by the Treasury secretary-general on Aug 18 in Kuala Terengganu.

He said the differing stands of the state and Federal Government on the amount of oil royalties to be paid had prolonged discussions between the two sides.

"There is a need for the Federal Government to return the rights of the Terengganu people based on the original agreement (on oil royalties)."

He said this in reply to a supplementary question from Datuk Seri Abdul Hadi Awang (Pas-Rhu Rendang) who wanted to know the achievement of the state government in negotiating for the return of oil royalties to Terengganu.

Hadi, in his original question, had asked for the state government to outline the latest development with regards to oil royalty payment to Terengganu.

Ahmad said the Federal Government put up several proposals, which the state government had disagreed to, resulting in the delay in getting back the oil royalty payment.

He said meetings with the Federal Government started soon after he was appointed menteri besar, with their first official discussion on Sept 16 last year.

There were three principles the state, federal governments and Petronas had agreed to raise in their discussions.

He said the three parties agreed that Petronas should pay the royalties directly to Terengganu, that all payments made by Petronas to the Federal Government between 2000 and this year be considered as oil royalties to Terengganu and for the state government to drop its suit against Petronas.

"The state government will not sign any agreement or drop its court case until it is satisfied that all rights and interests of the Terengganu people with regards to the oil royalty are clearly spelt out."

At the Aug 18 meeting, Ahmad said the Treasury disclosed it had received RM15.847 billion from Pe-tronas between 2000 and March this year, but had disbursed RM16.576 billion.

Of that amount, RM14.89 billion had been spent in Terengganu for the state budget, state Special Funds Action Council and special programmes, such as those for Islamic Civilisation Park and Pulau Duyong development.

He said the funds were also used for projects carried out by various ministries and housing programmes spearheaded by the National Housing Company (SPNB) in Terengganu.


"During that period, the funds were used to finance other programmes in other states and to build houses by SPNB outside Terengganu. This amounted to RM1.686 billion.

"The Treasury agreed in principle to return to us only RM1.686 billion for its expenditures in other states. We do not agree to this amount and this resulted in a long-drawn out discussion as the Finance Ministry refuses to back down from its decision."