Sarawak Report has viewed copious documents indicating that in January 2017 the former Prime Minister personally pushed through an extraordinary RM1.25 billion project, which was  awarded to a car rental company in Bintulu, purporting to install solar energy supplies for 369 Sarawak schools in the interior.

Letters signed by Najib clearly authorised for the Ministry of Education’s strict rules on tendering and price negotiation to be over-ruled during the awarding of the project and later for payments to continue to be made, even though the terms of the contract were not being fulfilled by the company.

Ministry of Education staff who raised concerns about quality control were transferred from their posts, according to our information, and reports to the police and MACC were ignored right up until the last election. [update: the MACC have responded to say  they started an investigation in April, the month before GE14],

Insiders say several companies qualified to install solar power in Malaysia were by-passed for the contract, in favour of the politically connected Sarawak company, Jepak Holdings Sdn Bhd, which lacked a track record in the field.

So far, eighteen months into the three year contract, not a single solar power unit has yet been installed at any of the designated schools, although the money has continued to flow from the Department of Education.

Angry whistleblowers have now passed their dossier of damning information to senior anti-corruption figures in the new government, who have indicated the matter is now being investigated. As one disgusted insider told Sarawak Report:

“The company was made tycoon overnight by Najib.  This company even enjoyed a privilege never given to any companies in the world where even price comparison and negotiations were skipped. Najib’s Minutes for the Company encompasses issuing an Uncompromising Letter of Award, pressing the Ministry to forgo price negotiations and also requesting the Ministry to approve the finalized price set by the company itself.”

Particularly galling for Sarawak families is the fact that the consequences of the contract have included serious supply problems for the affected schools, many of which have been regularly cut off from electricity altogether and facing blackouts for several hours a day.

Previous to this project, which was touted to provide cleaner, cheaper solar energy, the affected schools relied on deisel generators, which were supplied and maintained by some 30 local companies, who were required to regularly tender for the service contracts by the Ministry of Education. Jepak Holdings had held one of the contracts.

However, under the new contract Jepak Holdings took over the entire diesel supply and maintenance work for all 369 schools for an agreed lump sum of RM21.8 million a month, whilst simultaneously being tasked to convert the schools to solar hybrid systems at a rate of at least ten schools a month.

It might appear a seemingly enlightened strategy, if placed in the right hands for the right amount of money.  However, insiders say that the diesel contract was in fact heavily inflated above the actual cost of supplying the schools.

Worse, despite raking in millions, the company has failed to provide sufficient upkeep and supply of the existing diesel generators, let alone install the new solar power supplies. The schools need 2 to 4 generators, but most are currently running on just 1 genset which can only provide electricity for a maximum of 12 hours a day.  According to a source:

“to cover up their incompetency, the company just falsified claims and in at least one case forged a school principle’s signature on forms to verify the work. The principle discovered this fraud when Ministry officials conducted a random check. The school head then wrote to officially complain to Ministry, but no action was taken.  Instead, the principle was later forced to withdraw the complaint after receiving threats.  He was even told to call certain high ranking officers in Ministry and to inform them that it had just been a misunderstanding.”

Jepak Holdings

So, what appears to be the background to this chaotic situation, where over a billion ringgit of public money appears to have been thrown at making life even worse for Sarawak’s interior schools and teachers?

Jepak Holdings is primarily a car rental company, set up in 1985, is owned by a senior PBB member Saidi Abg Samsudin, who is the Deputy Chief of the party’s Jepak, Bintulu seat.

He is right hand man to the state seat YB Talib Bin Zulpilip, a long-term party insider close to Taib Mahmud, who chaired the Sarawak Economic Development Corporation for many years.

Most crucially, perhaps, Saidi is known to have had a close relationship with Najib and Rosmah and since the issuing of the contract has also become a regular golfing companion of the Chief Secretary of the Ministry of Education, Alias bin Ahmad, whom the documents show took an unsual interest in helping force through the Sarawak schools solar project against the advice of civil servants.

Alias bin Ahmad resigned his post just before GE14, having sidelined staff whom he accused of being particularly critical of the management of the project.

It is understood that he was a personal appointee at the Ministry of Education of Najib’s, in that the prime minister had overruled the minister’s own selection for the post in favour of Alias.

Photographs show that Saidi prominently attended the wedding of Alias’s daughter in KL and closely socialised with the Chief Education Secretary.

Saidi also is understood to have supplied RM1 million that Rosmah presented to the families of victims of fire in a religious school last year and he has been photographed socialising with Rosmah’s key aide and spokesman Rizal Mansor.

The Bintulu man was equally known to have forged a close relationship with the former Eduction Minister himself, Mahdzir bin Khalid, who together with his Chief Secretary is said to have battled with civil servants to defend the contract and finally went over the department’s head to gain Najib’s approval to ignore rules on contracts.

Damning correspondence, which is now being examined by anti-corruption investigators, show that some months after the contract was initiated in 2017 Ministry of Education officials had suspended payments to Jepak Holdings, on the grounds that promised work was not being performed.

After apparent conflict between Education Department personnel and the minister and his chief secretary, who wanted the payments made, it was agreed that the minister would apply directly to Najib to gain prime ministerial authorisation to ignore the requirements of the department’s standard rules on contracts.

That authorisation was received in writing from the Prime Minister last July, which enabled Jepak Holdings to continue to receive vast sums of money, for apparently failing to perform even the most basic functions of its contract.

The key letter sent by the Education Minister to Najib Mahdzir Khalid (above) was entitled:  “Application to obtain special clearence to skip procument procedure for the Jepak project of power supply”.

Najib wrote in his own hand at the top of the letter a note to Datuk Othman, Head of Procurement at the Ministry of Finance, after the letter was stamped as received by his office:

“Dear Datuk Othman, I agree to give special clearence as requested. Please implement it. Thank You.

The note was signed by Najib in his capacity as Minister of Finance and dated 19th July. With this written permission the objections of Education Ministry staff were over-ruled and the money continued to flow into the non-performing project.

The directive continued a pattern of unorthodox procurement on the project, which correspondence shows was officially initiated by a letter sent by Jepak Holdings on November 6th 2016 to the Prime Minister himself, proposing the hugely expensive solar power project and extolling its virtues in cementing local Sarawak voters in their allegience to BN.

The letter was signed by Saidi and by the next day Najib had scrawled a written instruction at the top of the letter to the Education Minister. It read:

“Yb Datuk Mahdzir Khalid produce letter of award for this project based on Jepak Holdings letter immediately”

Again Najib signed the note in his capacity as Finance Minister, signed 7th November.

The unusual procurement process for the enormous project continued to be rushed through with a letter of award being produced just four days later on 10th November.

And the special prime ministerial assistence continued in April the following year, when the Jepak Holdings again wrote directly to Najib asking him to prod Education Chief Secretary Alias to forward a 9,8%  deposit payment of RM130 million on the project:

Once again scrawling on the top of the letter Najib signed and dated his instruction to Alias:

“Datuk Alias, I agree with Jepak’s request for the payment and do it fast  without delay.”

This was despite a letter of protest having been written days before on 30th of March by the Department of Education’s procurement head, Mr Aedy bin Ramli, complaining at the company’s failure to deliver on the project.

Conflict With Supplier

The billion ringgit fiasco seems set to focus anti-corruption investigators under the new Attorney General even more firmly on contracts relating to pliable politicians in Sabah and Sarawak and it appears the concerns over this particular project has spawned a number of related charges.

To carry out the solar side of the project, Jepak Holdings had apparently turned to a major supplier of solar panels, engaging with the company in a cosortium to supply the schools.  However, a dispute ensued with the supplier apparently alleging that Jepak misrepresented the nature of the requirements, by claiming that the Ministry of Education was expecting a hybrid solution that produced only 70% of the required power from the solar panels.

In fact, the contract stipulates that 90% of the energy must come from solar power, placing far more expense upon the supplier, which has caused deadlock on the production and supply. Under the contract at least 180 schools ought to have now receied panels, but so far none have been installed.

The supplier is believed to have filed its own suit, alleging it is owed several million.  Leaving investigators to discover why the prime minister and his advisors in the Department of Education and apparently his wife were all so keen to brush aside the rules and appoint a company run by a political ally to perform a billion dollar contract it was not equipped to carry out?