The Public Accounts Committee (PAC) has urged the Federal Land Consolidation and Rehabilitation Authority (Felcra) to review its 30,000-hectare commercial land bank target under Transformation Plan 2.0.
The committee said the five-year goal should be reassessed to better reflect Felcra’s financial capacity, noting that only 4,016.89 hectares — or 13% of the target — had been achieved as of the fourth year in 2025.
PAC warned that the shortfall raises concerns about Felcra’s ability to sustain long-term operating costs and remain competitive. With about 26,000 hectares still to be acquired, the committee said the target may not be realistic under current financial conditions.
Felcra was advised to establish a clear acquisition plan and secure sufficient funding sources to safeguard its financial sustainability.
The PAC’s review followed concerns raised by the Auditor General over governance weaknesses in Felcra Bhd’s RM241.76 million purchase of four oil palm estates between 2022 and 2024.
The acquisitions involved one estate in Telupid, Sabah, and three leasehold estates in Gua Musang, Kelantan — Aring, Dabong and Sungai Rawit 2 — covering a total of 4,016.89 hectares.
PAC identified weaknesses in procurement procedures, valuation processes and yield assessments. It noted that Felcra’s strategy of acquiring lower-performing and cheaper plantations could significantly delay returns, as actual yields differed from projections. As a result, the return on investment (ROI) period was extended to between 11 and 22 years.
The committee also found that the Telupid acquisition did not fully comply with a prior board decision, while the three Kelantan estates were purchased in what it described as a rushed manner.
To prevent similar issues, PAC recommended that Felcra conduct independent valuations and due diligence through qualified external consultants for future acquisitions. It also proposed a minimum 15 to 30-day timeline between board approval and signing of acquisition agreements to ensure proper governance.
Although Felcra operates under the Ministry of Rural and Regional Development, PAC noted that the ministry does not oversee daily operations, as the agency funds its operating expenses internally. Final approval for plantation investments — capped at RM125 million — rests with Felcra’s board.
Felcra is wholly owned by the Minister of Finance (Incorporated) and is responsible for rehabilitating and developing underperforming state land schemes into productive agricultural assets that support rural communities.
In total, PAC issued nine recommendations aimed at strengthening governance, improving acquisition discipline and ensuring future expansion aligns with Felcra’s financial capacity.
