Parliament’s watchdog calls for a revised land bank goal, citing financial risks and governance issues in recent oil palm estate purchases.
KUALA LUMPUR: The Public Accounts Committee (PAC) has called on the Federal Land Consolidation and Rehabilitation Authority (FELCRA) to reassess its target of acquiring a 30,000-hectare land bank.
PAC chairman Datuk Mas Ermieyati Samsudin said the goal should be revised to a more realistic level by considering FELCRA’s financial capacity, a clear acquisition plan, and assured funding sources to avoid risks to the company’s long-term financial sustainability.
She noted that FELCRA’s Transformation Plan 2.0 target for 2025 had only achieved 13%, or 4,016.89 hectares, despite the group recording consistent net profits between 2021 and 2024.
Mas Ermieyati stated that this failure to secure sufficient land raises concerns over the company’s long-term ability to cover operating costs and maintain competitiveness.
The PAC also found that FELCRA’s board had approved the acquisition of four new oil palm estates out of 33 proposals to meet its land bank target, with the purchases fully financed using internal funds.
She revealed that the decision was based solely on internal studies without external due diligence, as resolved by the board.
Governance weaknesses highlighted in the Auditor General’s Report included the rushed signing of agreements between seven and 12 days after board approval and irregular meeting records.
Mas Ermieyati added that FELCRA’s strategy of acquiring lower-performing plantations had exposed it to a lengthy capital recovery period, as actual yields differed significantly from initial projections.
This discrepancy resulted in the return on investment period being extended to between 11 and 22 years for the acquired estates.
She confirmed that the performance of the four oil palm estates has now begun to show improvement despite earlier issues.
The PAC put forward nine recommendations to strengthen governance, improve procurement discipline, and ensure future expansion aligns with FELCRA’s financial capacity.
Mas Ermieyati said the Ministry of Rural and Regional Development must expand its regulatory scope to cover governance and strategic asset acquisitions, including those financed internally.
She also stated that the Ministry of Finance and KKDW must strengthen the board’s composition by appointing external members with diverse expertise to enhance governance.
FELCRA is fully owned by the Minister of Finance Inc and falls under the supervision of KKDW, with a mandate to promote rural development and transform underperforming land schemes.
 The Sun Malaysia
