PAC urges FELCRA to implement procurement SOPs and comply with statutory requirements to ensure investment sustainability and avoid future losses
KUALA LUMPUR: The Federal Land Consoliadtion and Rehabilitation Authority (FELCRA) Bhd must seriously implement the Public Accounts Committee’s (PAC) recommendations on oil palm plantation procurement management and comply with all statutory requirements.
PAC chairman Datuk Mas Ermieyati Samsudin said full compliance with the newly strengthened procurement standard operating procedures (SOP) was crucial to ensure the sustainability of the company’s investments.
“It is also important to avoid the risk of future lossess and safeguard the company’s long term financial stability,” she said at a press conference at Parliament today.
Mas Ermieyati said the PAC today tabled a report on follow-up actions taken by ministries and agencies on recommendations contained in its report on FELCRA’s oil palm plantation procurement management under the MInistry of Rural and Regional Development (KKDW).
She said the report detailed follow-up actions taken by KKDW and FELCRA on nine recommendations made by the PAC following governance weaknesses in he procurement of four commercial oil palm palntations, as highlighted in the Auditor-General’s Report 2/2023.
To ease the company’s financial burden, she said FELCRA had decided to defer any new commercial land bank acquisitions and prioritise its Estate Replanting Programme, which involves an allocation of RM52 million.
On investment performance, she said fluctuating operating costs and the need for large-scale replanting had shifted the projected return on investment (ROI) for the Telupid Estate from the original target of the nonth year to the 19th year in 2040.
Following this, the PAC has requested that future financial simulationd incorporate break-even analysis.
Mas Ermieyati also said FELCRA’s new SOP requires external consultants’ viability assessment reports to be presented to the board of directors and introduces a cooling-off period of between 15 and 30 days before agreements are signed.
“However, the PAC stresses that compliance with the SOP is critical as its effectiveness has yet to be tested because no new commercial asset acquisitions have been carried out.
“In conclusion, FELCRA Bhd must be serious in implementing the recommended actions and comply with all statutory requirements that have been set,” she said.
