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Harris confirms Ku Li on 5pc: Stephens agreed and was ready to sign deal
Published on: Wednesday, July 10, 2024
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Harris confirms Ku Li on 5pc: Stephens agreed and was ready to sign deal
Harris (left) was confirming Tengku Razaleigh Hamzah’s (right) revelation in his recently-released memoir that Fuad’s predecessor, Tun Mustapha Harun, refused to agree that Sabah would only receive five per cent in petroleum royalty.
Kota Kinabalu: Former Chief Minister Tan Sri Harris Salleh said late Tun Fuad Stephens supported the Petroleum Development Act (PDA) which decreed 5pc royalty for oil and gas extracted from Sabah because he believed it will usher more federal funds for Sabah’s development.

He said Fuad, who was elected Chief Minister after helping the Federal Government displace Usno, was also influenced by international pressures, including British decolonisation and American push for an integrated Borneo.

“With the British under pressure to grant independence to its colonies and America pushing for an integrated Borneo island, Tun Fuad chose to side with Malaysia rather then follow the American recommendation. 

“This period coincided with the formation of Berjaya. Tun Fuad recognising Parliament as the supreme Malaysian authority, supported the Petroleum Act, which promised more federal funds for Sabah’s development,” he said in a statement, Tuesday. 

Our report on July 8.

“Tun Fuad was about to sign the five per cent agreement but tragically died in a plane crash known as the Double Six crash,” he said.

Harris was confirming Tengku Razaleigh Hamzah’s revelation in his recently-released memoir that Fuad’s predecessor, Tun Mustapha Harun, refused to agree that Sabah would only receive five per cent in petroleum royalty.

Razaleigh, popularly known as Ku Li,  revealed that following dissatisfaction over Sabah being granted only 5pc, rather than 10-20pc, Mustapha threatened to pull Sabah out of Malaysia.

He had to step down as Chief Minister in November 1975 with elections called in early 1976 where Berjaya won 28 seats in State Assembly to Usno’s 20. 

Tun Salleh Said Keruak was appointed CM in the months leading to the State election.

Razaleigh said Tun Mustapha did not wish to meet him and ordered him to return to Kuala Lumpur on the next available flight when he flew to Kota Kinabalu to talk things over.

The former Petronas Chairman and Finance Minister said Mustapha’s stand also coincided with his request for the Federal Government to guarantee a US600 million loan, which was rejected by then Prime Minister Tun Razak, who wanted to know what the money would be used for before the Federal Cabinet would agree.

“At that time, oil was only produced in the Semarang area of Labuan. The question arises as to why Tun Mustapha, a very staunch supporter of Sabah joining Malaysia’s formation, considered pulling out over the issue of oil royalties. 

“The agreement allowed for negotiations to increase up to 20 per cent. On the other hand the late Tun Fuad Stephens who was initially staunchly against (forming) Malaysia, only agreed after persuasion from the late (Singapore Prime Minister) Lee Kuan Yew,” he said. 

“Tun Fuad believed that it was better for oil and gas to be managed by the Federal Government, as seen in many countries worldwide including Saudi Arabia. 

“He observed that the (Usno-led) Sabah Government mismanaged its oil resources and was plagued with corruption. 

“Eventually, Tun Fuad agreed to sign the five per cent oil royalty agreement after looking at the broader picture at that time,” he said. 

Harris noted, however, that Malaysia’s political dynamics changed during the administration of former PM Datuk Seri Najib Razak. 

“The Federal Government, led by Najib  needed the support of Sabah and Sarawak’s 60 members of parliament to form the Government. 

“From 2018 onwards, many powers were transferred to Sabah and Sarawak. Under siege, Najib departed from traditional conventions to secure the necessary support,” he said. 

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