The PAS-led Felda settlers children's association or Anak has warned that the Federal Land Development Authority (Felda) may be hit by a deficit of RM1.25 billion to RM1.5 billion annually if the proposed listing of its subsidiary Felda Global Ventures Holdings Bhd (FGV) goes through.

NONEThis will be the consequence of Felda handing over all its stake to FGV, receiving in return only RM251 million annually from fixed leased payments and a 15 percent profit from FGV's agriculture operations valued at between RM257 million and RM508 million, depending on the market.

Anak president Mazlan Aliman (right) in revealing the terms of the agreement between Felda and FGV raised the question of who was to bear the remaining RM1.25 to RM1.5 billion burden.

Anak economic advisor Rosli Yaacop, former Bank Negara deputy director, said Felda's revenue in 2010 was RM2.4 billion but its operating cost was RM2 billion.

NONERosli (right) added Felda turned in a profit of only RM400 million that year.

"However, with the listing exercise, Felda will still be entrusted with the operations exercise of the settlers and the land but they will in return get a total income of RM251 million from the lease and an additional RM257 million or RM508 million depending on the oil palm fruit output.

"That leaves Felda with a deficit of RM1.25 billion to RM1.5 billion in operating costs. Who will meet the operating costs of Felda if not the taxpayers or government then," said the Negeri Sembilan PAS deputy commissioner.

Showing the agreement, Mazlan who is also a PAS central committee member, said this was raised by former Felda director-general Zulkifli Abd Wahab, and other senior executives but their question was termed insubordination and he was given the boot.

"I feel this is a legitimate question. Felda is the mother company but in the end its subsidiary will be listed and on top of that the assets of Koperasi Permodalan Felda Bhd (KPF) is to be incorporated into FGV.

"This question remains unanswered by the deputy minister Ahmad Maslan, Felda chairperson Isa Samad and the prime minister who is the leader in charge of Felda itself," he said.

Felda self-sufficient in 1990s

Mazlan pointed out that in the 1990's Felda was self sufficient, as it generated its own income to cover its expenses.

Former prime minister Dr Mahathir Mohamad, according to Mazlan, wanted a stop to Felda relying on a RM100 million annual grant and as a result it had become self-sufficient and even generated profit.

However, once listed, he stressed Felda would not only have to find a new source of income as a result, but may have to face the annual deficit threat.

That question posed by Zulkifli remains unanswered till today, he said.

"I challenge the BN government to explain the details of the agreement between Felda and FGV and reveal how Felda is to generate more income to fund its operating costs with this exercise," he said.

The listing exercise, Mazlan said is not a step forward for the settlers, as there is a possibility that their welfare would be neglected.

He said at present Felda’s role is to build infrastructure and facilities in the settlements, besides paying the salaries of its 23,000 employees which costs RM500 million annually.

“With FGV only paying lease and also a small portion of the profit how do one expect Felda to survive when its operations cost RM2 billion. I would not be surprised if Felda may have to rely in asking the government to finance its operating costs as it is not stated in Felda’s agreement with FGV,” said Mazlan.

Foreigners occupying Felda?

Mazlan also explained the experience of Felda’s subsidiary company Felda Oil Products Sdn Bhd, where initially it (Felda) had a controlling stake of 70 percent in the 1970s.

“However, as its interests is diversified with Japanese-based Mitsui and a Dubai-based company raising their stakes, its chief executive officer who was once a local is now replaced by a foreigner.

"Similarly with the FGV listing exercise, there will be a possibility that the company will now be run by foreigners if they manage to increase their stake in FGV as had happened with Felda Oil Products.

azlan“If that is the case what will happen to the settlers who had given their land to Felda and in turn Felda leased them to FGV. Certainly in the end the settlers who have been toiling the land these years would lose out,” he warned.

Mazlan said Anak will go on a roadshow to explain all this to the 317 Felda land schemes.

However, he also pointed out the roadshow has been hampered by threats, despite Anak having police permits to meet the settlers.

“Isa (Samad) have been using Rela and the auxiliary police to stop us. They have been calling us traitors and robbers in trying to stop the listing exercise. However, we will persevere and continue to go nationwide to garner support to stop the listing exercise which has been brought forward to April.”

The Anak chief also related that they had also met the Cooperatives Commission to question the status of Isa in heading KPF as per the appointment letter by PM Najib Abdul Razak dated Aug 15, whereas Isa is not a KPF member.

“I am worried that the commission which is to safeguard the interests of cooperatives would be pressured by the BN government to go ahead with Isa’s appointment although it is wrong and against the law. The commission has not given any response on whether Isa is a member of KPF,” he said.

Only KPF members are allowed to hold senior posts in the cooperatives.

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