Tuesday, September 18, 2007

Focus on Stalled Hotel Project in Sabah

A stalled RM24.2mil budget hotel project in the city centre and state property mortgaged without approvals – these are among instances of lapses in accountability involving the state-owned Sabah Economic Development Corporation (Sedco).

The Auditor-General put Sedco under the microscope and raised numerous instances of lapses in accountability in transactions that wasted public funds.

Zeroing in on Sedco’s three wholly-owned Perkasa hotels and majority-owned Hyatt Regency Hotel, where the state has a 43% stake, the Auditor-General provided details of how millions of ringgit could have been saved if procedures had been followed.

According to the state’s 2005 public accounts, Sabah borrowed RM1bil from the Federal Government and, in turn, loaned some RM1.12bil to its various agencies, including the single largest amount of RM305.57mil to Sedco.

Sedco already owed the state government a total of RM278.62mil from its inception in 1981.

One of the purposes of the loans to Sedco was to fund its hotel ventures under Kinabalu International Hotel Sdn Bhd in the city and Perkasa Holdings Sdn Bhd in Keningau, Kundasang and Tenom.

The Auditor-General noted that Perkasa’s first hotel in Kota Kinabalu, costing RM24.2mil, was supposed to provide budget accommodation but stalled after RM5.04mil had been spent for part of its construction.

The Auditor-General also queried the RM25mil loan undertaken by Kinabalu International Hotel in 1997 to partly finance the RM45mil refurbishment of its Hyatt hotel here.

According to the report, the loan was secured by using the hotel and its land, valued at RM140mil, as collateral.

Source : STAR
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