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  Media Statement (2) by Lim Kit Siang in Petaling Jaya on Friday, 19th December 2008: 

RM4.6 billion PKFZ scandal – answer five questions and not just rehash chronology of events

Transport Minister Datuk Ong Tee Kiat should not dilly-dally or backtrack from his repeated promises eight months ago to “tell all” about the RM4.6 billion Port Klang Free Zone (PKFZ) scandal.

For instance, the Star report of April 8, 2008 headlined “Ong to tell all on Port Klang Free Zone” quoted him as saying:

“I wish to inform the rakyat about the true situation – whether it was actually squandered, not squandered, and where it has gone to, as well as the breakdown of the budget.”
Now, Ong is backpedaling from his promise, as he said yesterday that he would announce the chronology of events in the PKFZ issue but not into its financial aspects – allegedly because PricewaterhouseCoopers “is still finetuning its report on the financial aspects involving PKFZ as there are some formalities it needs to look through before concluding the report”.

This is a most extraordinary turn of events as more than a month ago, Ong had said publicly that the PricewaterhouseCoopers report into the PKFZ scandal was ready to be made public “soon”.

The Star report of Nov. 16, “Report into PKFZ scandal to be made public soon” quoted Ong as promising that “everything would be settled” by the fourth quarter of this year and that he would reveal what had been compiled.

Let me tell Ong: don’t just rehash the chronology of events of the PKFZ scandal (I doubt he would have anything new to add to what I had revealed already in Parliament on the PKFZ chronology of events) but just answer the five questions about the RM4.6 billion PKFZ scandal which I had posed to him more than eight months ago on April 9, 2008, viz:

1. Was it true that when the Port Klang Authority and the Transport Ministry insisted on buying the 1,000 acres of Pulau Indah land for PKFZ at RM25 psf on a “willing buyer, willing seller” basis, in the face of strong objection by the Attorney-General’s Chambers and the Treasury which had recommended that the land be acquired at RM10 psf, the Cabinet had given its approval subject to two conditions: (i) categorical assurance by the Transport Minister that the PKFZ proposal was feasible and self-financing and would not require any public funding; and (ii) that every RM100 million variation in the development costs of PKFZ would require prior Cabinet approval.

2. In the event, the first condition was breached when the PKFZ project ballooned from RM1.1 billion to RM4.6 billion requiring government intervention and bailout while the second condition was breached with the original PKFZ development costs of RM400 million ballooning to RM2.8 billion without any prior Cabinet approval ever sought for every RM100 million increase in development costs.

3. The Transport Minister had unlawfully issued four Letters of Support to Kuala Dimensi Sdn. Bhd (KDSB), the PKFZ turnkey contractor — to raise RM4 billion bonds, which were regarded as government guarantees by the market. The Transport Minister had no such powers to issue financial guarantees committing the government, as it could only be issued by the Finance Minister and only after Cabinet approval. The first Letter of Support was issued by the former Transport Minister, Tun Dr. Ling Liong Sik on May 28, 2003, which was Liong Sik’s last day as Transport Minister while the other three were issued by Liong Sik’s successor, Datuk Seri Chong Kong Choy.

4. Whether it wasn’t true that in recognition that the four unlawful “Letters of Support” of the Transport Minister had nonetheless given implicit government guarantee to the market that the Cabinet had in middle of last year gave retrospective approval for the unlawful and unauthorized four Letters of Support by the Transport Ministers in the past four years creating RM4.6 billion liability for the government in the bailout of PKFZ.

5. Why no action had been taken against the two previous Transport Ministers, both Liong Sik and Kong Choy, as well as the government officials responsible for the unlawful issue of the four “Letters of Support” - getting the government embroiled in the RM4.6 billion PKFZ scandal?


* Lim Kit Siang,  DAP Parliamentary leader & MP for Ipoh Timor