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PKFZ’s RM12.5bil cost only “an estimate”

KUALA LUMPUR, 22 June 2009: The final cost to tax payers of the Port Klang Free Zone (PKFZ) scandal has yet to be determined, Transport Minister Datuk Seri Ong Tee Keat said today.

Ong, who delivered a ministerial statement in Parliament, said that the ballooned figure of RM12.5 billion for the mismanaged PKFZ project was only an estimate.

“This is hypothetical. It is not as if it is the amount (PKFZ) currently owes,” Ong said at a press conference in Parliament after delivering his statement.

Ong explained that the RM12.5 billion figure would be the total cost of the project in 2051, including additional interests incurred if the Port Klang Authority (PKA) could not repay its Finance Ministry soft loan on schedule.

“This is provided there is no intervention (by the government) and [without] efforts to further promote PKFZ,” Ong said in his ministerial statement.

“In fact, various initiatives to promote PKFZ have seen results lately, specifically from the increase of potential tenants (in the project),” Ong added.

However, Ong failed to elaborate on any concrete plans for such government intervention. “We are going to pursue this further,” he said.

On 10 June, Ong announced that a special task force had been formed to review and restructure the PKFZ project from a legal and financing perspective. Two separate committees would also look into areas of corporate governance and business opportunities.

“Within two months, they will come up with steps and recommendations,” Ong said.

The PKFZ, an integrated 1,000-acre zone offering facilities for international cargo distribution, was approved by cabinet in 1999. In 2001, it was estimated to cost RM1.9 billion.

However, a PricewaterhouseCoopers (PwC) audit report highlighted procedural improprieties which led to the cost of the PKFZ project ballooning to RM7.5 billion.

In his ministerial statement, Ong also stressed that Bintulu parliamentarian Datuk Seri Tiong King Sing had no conflict of interest in his involvement with PKFZ.

Ong revealed that Tiong, who is also Kuala Dimensi Sdn Bhd (KDSB) chief executive officer, did not hold any posts in PKFZ Sdn Bhd or the PKA.

KDSB sold the land for PKFZ to the PKA, and was the project’s main contractor.

On 15 June, news reports said that Ong was expected to answer all points raised by Opposition MPs in his ministerial statement. He was also expected to outline the government measures taken to save the PKFZ project.

However, DAP parliamentary leader Lim Kit Siang said he was “very disappointed” with Ong’s statement.

“He said nothing that is not already known by the public,” Lim said at a press conference after Ong’s statement.

Lim called on Ong to give another ministerial statement tomorrow “to give a proper and satisfactory account” of the PKFZ fiasco.

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3 Responses to “PKFZ’s RM12.5bil cost only “an estimate””

  1. John Bastille says:

    The Malaysian Rakyat can sleep easier tonight. The loss is merely an estimate. I mean, the amount of RM12.5 BILLION is just a rough figure, give or take, a few BILLION.

    We have such considerate leaders in BN that do not want us to be perplexed by this embarrassing episode. But then, every episode has been embarrassing, no?

  2. james au says:

    Malaysia is such a rich and prosperous country and I’m really jealous at the way BN politicians are squandering the country’s wealth at their whims and fancies probably for their own gains. But this time around RM12.5 billion lost is just too big to sweep under the carpet. If memory doesn’t fail me, there are several “mini losses” of 2 or 3 billions that have gone unaccounted for these past 20 years! The most notable of such is during the “Mahathir Era”. What Malaysian politics are experiencing right now is the side effects of the “Mahathir Dilemma” where his power was supreme and unquestionable! The PKFZ scandal is only the tip of an iceberg. Believe me… there are more to come. Good Luck to All Malaysians.

  3. Andrew I says:

    Within two months. Two whole months. I don’t think we can remember for that long, especially if another bag of laundry gets thrown out in the meantime.

    Whatever happened to Performance Now? And where’s Headmaster Koh?

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