Why were RM8.3 billion paid for only 13 per cent pipeline work?

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RM8.3 Billion Paid for 13 Per Cent Pipeline Work Amidst Project Irregularities

Suria Strategic Energy Resources Sdn Bhd (SSER) received RM8.3 billion for the Multi-Product Pipeline (MPP) and Trans-Sabah Gas Pipeline (TSGP) projects, despite only 13 per cent of the work being completed. The MPP, valued at RM5.35 billion, aimed to construct a 600km oil pipeline from Jitra to Port Dickson. Concurrently, the TSGP, a RM4.06 billion project, was intended to establish a 662km gas line connecting the Kimanis Gas Terminal to Sandakan and Tawau.
Contract Award and Incorporation of SSER

The contracts for both the MPP and TSGP were awarded to the China Petroleum Pipeline Bureau (CPPB) in November 2016. SSER, a wholly-owned unit of the Finance Ministry, was incorporated in 2016 specifically to undertake these two pipeline projects. The contracts were formally signed by Tan Sri Irwan Serigar, who held the positions of former Treasury secretary-general and SSER chairman at the time.
Project Value and Payment Discrepancy

The total value of the two pipeline projects amounted to RM9.4 billion. The significant payment of RM8.3 billion, representing a substantial portion of the total project cost, was made despite the low completion rate of only 13 per cent. This discrepancy was identified within the Finance Ministry's internal documentation, referred to as "red files."
Defence of the Projects

Former prime minister Datuk Seri Najib Razak has defended the MPP and TSGP projects, expressing confidence that all necessary legal and procedural requirements were adhered to during their negotiation and execution. He asserted that these projects were intended to bring considerable economic benefits and enhance energy security for Malaysia. Najib also cautioned against politically motivated allegations involving foreign state-owned companies, citing potential negative impacts on international relations and trade.

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Why were RM8.3 billion paid for only 13 per cent pipeline work?

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