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Media Statement by Lim Kit Siang in Petaling Jaya on Tuesday, 28th April 2009: 

Cabinet tomorrow should overrule Ong Tee Keat’s “passing-the-buck” game and direct the immediate and full publication of the PwC Report on the PKFZ scandal and respond as to whether PKFZ had escalated four-fold from original cost of RM1.8 billion to RM8 billion

The Cabinet tomorrow should overrule Transport Minister, Datuk Seri Ong Tee Keat’s “passing-the-buck” game and direct the immediate and full publication of the PricewaterhouseCoopers (PwC) Report on the Port Klang Free Zone (PKFZ) scandal and to respond to the Edge cover report that the cost of PKFZ had escalated fourfold from the original RM1.8 billion to RM8 billion.

Ong should not try to distract public attention from the real issues about the PKFZ scandal by threatening that he would be “checking with his legal adviser and see if the article carried in the weekly was libellous”. (Star April 27, 2009)

Let him respond fully, frankly and forthrightly to two issues:

Firstly, why as the Transport Minister he had reneged on his promise made in April last year, as reported by Star (April 8, 2008) headlined:"Ong to tell all on Port Klang Free Zone"quoting him:

“I wish to inform the rakyat about the true situation – whether it was actually squandered, not squandered, and whether it has gone to, as well as the breakdown of the budget.”

Three weeks later (Star April 29, 2008), to demonstrate the sincerity and seriousness of his pledge that he would “tell all” about the PKFZ scandal and that he was adopting a very proactive rather than hands-off stance, Ong announced that he would be making an announcement of the new Chairman of the Port Klang Authority (PKA) to take over from Datuk Chor Chee Heung (who had then been re-appointed a deputy minister in the new cabinet) and he was going to direct the new chairman (Datuk Lee Hwa Beng) to conduct a special audit of all the PKFZ accounts.

A week later, (Star May 3, 2008), Ong announced that the new PKA Chairman, Lee would name the independent accounting firm to conduct an overall audit on the PKFZ in view of allegations that it was a “white elephant” and “ghost town” – and the firm turned out to be PwC.

From a very proactive stance of wanting to “tell all” about the PKFZ scandal and in the earliest time possible, Ong has now taken a diametrically opposite position of being totally “hands-off”, very indifferent about the procrastination in the publication of the PwC report on the PKFZ scandal.

Ong now says that it is neither his fault nor his responsibility that the PwC report has not been made public, passing the buck to the PKA.

He said there were certain documents including correspondence that needed to be declassified before they could be included in the report.

He said the Port Klang Authority had applied for them to be declassified and was in the midst of following up on the matter with the relevant ministries.

He said:

“I have said that the port authority will make the report public and not the Transport Ministry because it was the authority that commissioned the investigations.

“The port authority will have a free hand to release the report when it is ready and there will be no intervention from the ministry. This has been my commitment from the beginning of the investigations.” (Star April 27, 2008).

What does Ong mean when he said that the PKA has “a free hand to release the report when it is ready and there will be no intervention from the ministry”? Is this double-speak to give the PKA the “free hand” to give a mountain of excuses as to why it could not release the PwC report on the PKFZ?

Ong was not speaking the truth on Sunday, as he had earlier publicly pledged that the PwC report on PKFZ would be made public “once it is handed over to the Transport Ministry” – reported in the Star(November 17, 2008)under the headline “Ministry to release PKFZ report once it gets it”.

Why is he now doing a flip-flop and passing the buck back to the PKA?

Let me also remind Ong of a public statement by the PKA Chairman Lee, as reported by the Star “Probe into PKFZ scandal under way”(October 30 2008) that “It will be up to the Transport Minister to decide if the report will be made public”.

Now, who is telling the truth or the lie – Minister Ong Tee Keat or PKA Chairman Lee Hwa Beng?

The Edge (April 27 – May3, 2009) which carried the cover story of “Total PKFZ bill – RM8 billion?” published a letter from Datuk Lee Hwa Beng that his term as PKA Chairman expired on March 31 this year and is therefore unable to respond as chairman of PKA.

Can Ong explain his Ministerial inefficiency and incompetence in allowing the post of PKA Chairman to remain vacant from March 31, when he should have known that it is important to either re-appoint Lee or appoint a new Chairman so that no one could make the excuse that no decision could be made during the month of April on the publication of the PwC report on PKFZ scandal as the post of PKA Chairman is vacant!

In any event, the excuse that the delay in making the PwC report public is because of problems with declassifying certain documents is unacceptable, as such problems would have been taken into consideration before Ong made the categorical statement last November that the PwC report would be made public “once it is handed over to the Transport Ministry”.

This is because Ong had at that time said that the PwC report, “which had to fulfill some conditions imposed by the Finance Ministry”, was “now ready and would be handed over to him” – and that could only mean problems over declassification of documents for making the report public.

In any event, Malaysians have enough of excuses for the procrastination in making the PwC report on PKFZ scandal public, which was to be made by end of last year, and the Cabinet should step in to direct the immediate and full publication of the PwC report on the PKFZ scandal.

If the Cabinet is not prepared to override Ong Tee Keat to direct the immediate and full report of the PwC Report, then the Najib Cabinet would have failed in its second weekly meeting the Najib motto of “1Malaysia. People First. Performance Now” with regard to the pledge of accountability and transparency which Datuk Seri Najib Razak had made when he took over as Prime Minister on April 3.

The second issue on the PKFZ scandal which Ong should not try to obfuscate with his verbal gymnastics is the specific question whether the PKFZ scandal has ballooned from RM1.8 billion when Datuk Seri Dr. Ling Liong Sik was the Transport Minister, to RM4.6 billion under Datuk Seri Chan Kong Choy and now RM8 billion under Ong.

The Edge report on “Total PKFZ till – RM8 bil?” states:

“According to sources, the latest figures indicate that the PKA's total cost of building the PKFZ, which sprawls across 405ha, is much more than RM4.6 billion because its cost of funds is 11.5% and not 7.55 as envisaged.

“Based on the cost of funds of 11.5% for a project where RM3.77 billion is raised over 10 years, the cost for the PKA could come up to about RM8 billion, says a bond dealer.

“It is said that the huge cost, one that the PKA would find hard to recoup, is one of the highlights in the PricewaterhouseCoopers (PwC) report that the government has so far not made public.

“Other contentious issues said to be in the PwC report are:

  • Poor controls and governance on the part of the PKA and other government authorities during the construction of the project. There were no cost controls. Even after the alarm bells rang on the rising cost, more debt papers were issued to the market;

  • Inconsistency in government guarantees underlying the debt papers. There were four government guarantee documents, out of which only one followed standard procedures;

  • Unusual arrangements in the payment mechanism. Payments to bondholders were done through a third party — Kuala Dimensi Sdn Bhd;

  • PKA’s coupon payment to Kuala Dimensi was 7.5% per annum. But the payments attached to the four sets of debt papers issued to finance PKFZ were between 4.15% and 6%;

  • The terms of financing were unfavourable to the PKA. For instance, the calculation of interest was based on a yearly rest, which was unusual and more expensive for the authority compared with a monthly rest; and

  • Dubal-based Jafzi had recommended the project to be implemented in phases but this was not followed.

“Many other contentious issues were raised in the PwC report, according to sources, and one of them was the final cost to the PKA.”

Malaysians are entitled to the truth and all the facts about the PKFZ scandal as it seems to have mushroomed into an even bigger financial scandal whenever a new MCA leader takes over as Transport Minister – and there have been three MCA Transport Ministers in the past eight years.

As Ong continues to avoid the issue, is the Cabinet tomorrow prepared to give him a clear directive to issue a serious and proper response to the Edge’s expose that the PKFZ scandal had ballooned from RM1.8 billion under Liong Sik, to RM4.6 billion under Kong Choy and now RM8 billion under Tee Keat?

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



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