March 3, 2017
It was a pleasant surprise for many Malaysians when Saudi Aramco signed a share purchase agreement on Tuesday with Petronas for a stake in the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor.
This was mostly so because just about a month ago, there were reports that Saudi Aramco was pulling out of the deal, putting the project which is central to the mammoth Pengerang Integrated Petroleum Complex (PIPC) in jeopardy.
The PIPC project, which is the brainchild of former Johor menteri besar Tan Sri Abdul Ghani Othman is one of the largest industrial developments in the region as well as Petronas’ largest downstream investment on a single site.
It was estimated to generate RM18.3 billion Gross National Income (GNI) by the year 2020 and help to create 8,600 high-income and high-skilled jobs.
Detractors of Prime Minister Datuk Seri Najib Razak were quick to speculate that the supposed snag had something to do with the 1MDB controversy, which is currently the focal point of opposition against his administration.
This was proven not to be so by the signing of the agreement.
Significantly, the agreement was sealed in presence of the Saudi king Salman Abdulaziz Al Saud who is the Custodian of the Two Holy Mosques, and Najib.
It was signed by Amin H. Nasser, president and CEO, Saudi Aramco and Datuk Wan Zulkiflee Wan Ariffin, President and Group CEO, Petronas.
The signing ceremony was held in conjunction with King Salman’s state visit to Malaysia.
There was little doubt that the friendship between King Salman and Najib played a crucial role in pulling through the USD7 billion deal.
Now that the agreement had been inked, Saudi Aramco and Petronas will hold equal ownership in selected ventures and assets of the RAPID project within PIPC .
This latest positive development must be a hard blow for those who had predicted a gloomy picture of the country’s future, especially its all important oil and gas industry, which had been hit hard by the current slump of world oil prices.
The opposition parties in particular have been against the project since its inception in September 2010, using issues related to it as a campaign tool in the run up to the last general election.
On Sept 30, 2012, the now defunct Pakatan Rakyat (PR) opposition coalition was reported to have pledged to stop the RM60 billion petrochemical project should it wrest federal power in the polls, which was eventually held on May 5 the next year.
The electoral pledge was aimed at capitalising on emotive issues surrounding the project such as the relocation of about 3,000 residents of several villages in Pengerang who were affected by it.
Johor PKR chief at that time, Datuk Chua Jui Meng made the announcement on behalf of then PR de facto leader Datuk Seri Anwar Ibrahim at the Himpunan Hijau Pengerang Lestari rally near the site of the project.
“If we do not win this case in court, this is Anwar’s message to you — when PR wins the Malaysian government, and we are sure to win… when he becomes the prime minister, he will stop this RAPID project,” Chua was quoted as saying.
Banners and placards condemning RAPID were hoisted during the rally.
Barisan Nasional, however, won convincingly in Pengerang when Datuk Seri Azalina Othman Said defeated former singer Tengku Intan Tengku Abdul Hamid of PKR and independent candidate Mohd Azaman Johari with a majority of 22,508 votes.
Chua, once the health minister when he was with MCA later faded into political obscurity after he was defeated in Segamat by MIC chief Datuk Seri Dr S. Subramaniam, who ironically now holds the same ministerial post.
On hindsight, it was fortunate that the opposition coalition failed to win the last general election as the country would have lost such a huge investment opportunity and the chance to propel itself forward via the RAPID and PIPC initiatives.
As the next general election draws near, the opposition will definitely come up with more electoral pledges against the government similar to the one they drew up five years ago on the development initiatives in Pengerang.
It is for the people to rationally judge whether they can believe in the opposition’s promises and accusations or a promise of a better tomorrow by the government that banks its appeal on a proven track record.