No late payment by 1MDB to LTAT's subsidiary on PUKL project - Lodin

Lodin, who is the Chief Executive of the Armed Forces Fund Board (LTAT), the parent company of PPHM, said payment by 1MDB has been very much on schedule to PPHM.

"PUKL is a big project for PPHM. The payment by 1MDB has been very much on schedule and our payment to the sub-contractors, who are mostly Bumiputeras, are also up-to-date," he said on the sidelines of Boustead Heavy Industries Corp Bhd's annual general meeting here, today.

Lodin is also chairman of BHIC and 1MDB.

He stressed that there was no issue in the delay of payment to PPHM, as it sometimes happen in the industry.

"As a contractor, you have to face a situation where sometimes you get your money early, sometimes you get your money a bit slow.

"But a contractor cannot be dependent on one or two projects. They need to make sure that they have projects that are profitable and cash flow must be strong to support this kind of project," he said.

PUKL also had no impact at all on LTAT's financial position, he added.

"We are strong, the fund (LTAT) is safe. And we got this key performance indicator where members will be given their money within 24 hours after they received their approval papers from the Minister of Defence.

"So, we guarantee that when you bring your completed documentation from the Minister of Defence, you will get your money in 24 hours. I'm sad by the allegation made by some people that we have not paid our members for so long," he said.

Lodin was referring to the baseless claims (made by PKR secretary-general Rafizi Ramli) that PPHM's deal with 1MDB in a relocation project was the reason for the delays in gratuity payments to non-pensionable veteran soldiers.

In 2013, 1MDB awarded a RM2.1 billion contract to LTAT to develop eight sites in the relocation of PUKL from the old Sungai Besi airport which will be redeveloped into Bandar Malaysia.

LTAT is undertaking the development through PPHM.

"The relocation jobs to locations such as Subang, Sendayan, Kuantan and Kajang are in progress and targeted to be completed sometime next year. Meantime, the related payment is on schedule," added Lodin.

Meanwhile, Lodin said he concurred with the recent remarks by Arul Kanda Kandasamy, the President and Executive Director of 1MDB, who said there were lessons to be learned from 1MDB's experience, where it should reduce excessive debt as well as high risk in the management.

"I fully support his view and what he's doing. When you undertake mega projects like what 1MDB is involved in, you cannot depend too much on borrowing funds.

"It has to be a combination of capital by shareholders and some borrowed money. You cannot heavily rely on borrowings," he said.

He said the inability of 1MDB to list Edra Global Energy Bhd in 2014 was one of the major reasons why the state-owned firm got into the financial situation it was in.

"If Edra were to be listed sometime at end-2014, then they would have enough money to pay back creditors and banks.