(photo : Mr McNamara, Chairman of World Bank on visit to FLDA development LBJ Scheme)
Originally, when it was first formed the accent was on profitability, with FLDA expected to yield an accounting “profit” due to the large sums of public monies committed to it. Later the Alliance government decided that the land settlement under FLDA should proceed without undue concern for capital repayment and interest, but to concentrate on rural development problem. In the end it was decided that FLDA schemes would be “sound economic propositions able, eventually, to pay their own way and based initially on sound financial provisions” yet for the sake of immediate development, actual profitability could be relegated to the future.(Rudner, 1975b)
One of my duties was to obtain funding for the organization. I negotiated with the World Bank for loans for the 2nd phase of the Jengka Triangle project . We had to go to Washington on a few occasions to obtain the loans. The World Bank financed the development of the whole project for US$52 million. They were essentially moneylenders and charged interest. Their concern was how the money was going to be spent. They were particular about contract awarding, they insisted on open tender system and the contracts awarded to the lowest bid – but we wanted a right to negotiate further with the lowest. At first they were not happy, but later they agreed.
Initially they required constant reporting, but later they relaxed when they realized that we were attaining our targets and paying them back on time. We had an excellent working relationship with them. They would send consultants to visit the projects. One of the consultant that visited was a Cuban. He was involved with the Bay of Pigs invasion and he described his experiences. I would always serve them durian, some liked it, others avoided the fruit. After awhile, they warned each other and learnt to anticipate this.
Once I sent Tan Sri Taib off at the airport at Subang, he was going on vacation to Australia. In those days, people would go for weeks, on account of the distance and long travel time.
Before leaving, he said, “Keep an eye of the finances.”
I told him that I was not in charge of the finances, it was another person, an Englishman named Clifford who was the Deputy Chairman in charge of Finance . Tan Sri Taib had not known that I was not involved on the finance side. One week later, he returned. I was very surprised and asked why he came back earlier. Apparently, he was thinking about the finances, and was worried.
I think I was lucky to have some good friends. One particular good friend was Ishak Tadin. He was in charge of Federal funding, and I would go to visit him to ask for funding to develop the schemes. I usually had a few ideas in my mind, and I would share it with him verbally.
I told him, “Give me the money, I will deliver you the projects”.
He trusted me enough to approve there and then the funding we needed. When I went back to the office, I would draw up the necessary written proposals, but it was always after the fact. FLDA would not have been able to move so fast without my friend, Ishak. By 1970 FLDA had become the leading spender in the government’s program for economic development. In the beginning of that year, the total sum drawn by FLDA from the Federal treasury was M$281 million (of which $211 million were loans) (Wikkramatileke, 1975).
We had to work very hard to inspire the confidence of our lenders. By the end of 1973, the government had invested M$460 million in loans and M$165 million in grants. In 1974 alone, the World Bank had lent us another USD$40 million for Johore Tenggara and ADB lent us M$8.4 million. We also received financial aid from the Japanese Overseas Economic Development Fund and the IBRD plus technical support, officers, equipment and knowledge from the UNDP and the governments of New Zealand, Germany, Belgium and the UK. In 1976, we received a loan from the Kuwait Fund.
We managed to pay back all our loans.