PAC Calls On Felcra To Reassess 30,000-Hectare Land Bank Goal
KUALA LUMPUR, March 3 (Bernama) -- The Public Accounts Committee (PAC) has recommended that the Federal Land Consolidation and Rehabilitation Authority (FELCRA) revise its target for acquiring a land bank of 30,000 hectares to a more realistic level.
PAC chairman Datuk Mas Ermieyati Samsudin said this should be done by taking into account FELCRA’s financial capacity, a clear acquisition plan and assurance of adequate funding sources to avoid risks to the company’s financial sustainability in meeting long-term operating costs.
“Although the FELCRA group’s financial position remains strong, with consistent net profits recorded between 2021 and 2024, the 30,000-hectare land bank acquisition target under Transformation Plan 2.0 by 2025 has only achieved 13 per cent, or 4,016.89 hectares.
“This failure to secure a sufficient land bank raises concerns over the company’s long-term ability to cover operating costs and maintain competitiveness,” she said in a statement today.
Mas Ermieyati said the PAC, which acts as Parliament’s financial watchdog, also found that FELCRA’s board of directors had approved the acquisition of four new oil palm estates out of 33 proposals to meet the 30,000-hectare target under FELCRA’s Transformation Plan and Strategic Direction.
The purchase of the four estates was fully financed using FELCRA’s internal funds.
“The decision to acquire the four oil palm estates was based solely on internal studies, without external due diligence, as resolved by the board of directors.
“Governance weaknesses highlighted in the Auditor General’s Report 2/2023 on the plantation purchases included the rushed signing of agreements — between seven and 12 days after board approval — as well as irregular meeting records,” she said.
Mas Ermieyati added that FELCRA’s strategy of acquiring and rehabilitating lower-performing, lower-cost plantations had also exposed the company to the risk of a lengthy period to recover its original investment capital, as actual yields from the acquired estates were found to differ significantly from initial projections.
“As a result, the return on investment (ROI) period had to be extended to between 11 and 22 years.
“Despite issues relating to yields and targets not being met as planned, the performance of the four acquired oil palm estates has now begun to show improvement,” she said.
The PAC also put forward nine recommendations to strengthen governance, improve procurement discipline and ensure that future expansion aligns with FELCRA’s financial capacity.
“The Ministry of Rural and Regional Development (KKDW) must also expand its regulatory and monitoring scope to cover governance and decisions relating to strategic asset acquisitions, including those financed using the company’s internal funds, and not be limited to projects under development allocations,” said Mas Ermieyati.
She also said that the Ministry of Finance and KKDW must strengthen the composition of the board of directors by appointing external members with diverse expertise to enhance FELCRA’s governance.
FELCRA is fully owned by the Minister of Finance Inc (MOF Inc) and falls under the supervision of KKDW.
The agency’s mandate is to promote rural development and enhance economic opportunities by facilitating income-generating activities for rural communities. It is also responsible for reviving and transforming underperforming state-owned land schemes into viable and productive agricultural ventures.
-- BERNAMA