Menteri Pengangkutan, Datuk Seri Ong Tee Keat, berkata, pencapaian itu lebih baik berbanding Jebel Ali Free Trade Zon (Jafza) di Dubai yang mampu menarik pelaburan 40 peratus dalam tempoh enam tahun.

“Ini permulaan yang baik kepada PKFZ walaupun baru dibuka dua setengah tahun. Prestasi ini diharap menangkis tohmahan yang menuduh PKFZ sebagai projek gajah putih,” katanya pada sidang media mengumumkan kronologi pembangunan PKFZ di sini, semalam.

Hadir sama, Pengerusi Lembaga Pelabuhan Klang (LKP), Datuk Lee Hwa Beng dan Pengerusi Eksekutif PKFZ, Lim Thean Shian.

Ong berkata, setakat bulan lalu, PKFZ mencatatkan pelaburan RM974 juta dengan 58 pelabur tempatan serta asing dan menyediakan 1,659 peluang pekerjaan.

Katanya, 46 hektar daripada 77 hektar tanah kosong disediakan PKFZ disewa 14 pelanggan, manakala 34 daripada 60 Unit Industri Ringan (LIU) disewa dan 95,033 daripada 25,000 kaki persegi ruang pejabat juga disewa.

Beliau berkata, jumlah pergerakan kargo kontena di PKFZ meningkat 495 peratus dengan 8,015 TEU bulan lalu berbanding hanya 809 TEU pada Mac, manakala bukan kontena meningkat 307 peratus dalam tempoh sama.

Ong berkata, penamatan kontrak Jafza yang bertanggungjawab mengurus dan mempromosikan PKFZ pada Julai tahun lalu tidak menjejaskan usaha menarik pelabur dari Timur Tengah.

Sementara itu, Lim berkata, kontrak Jafza ditamatkan kerana polisi syarikat berpangkalan di Dubai berbeza dengan PKFZ yang tertakluk di bawah Kementerian Pengangkutan selain perlu mematuhi syarat pelaburan yang ditetapkan Kementerian Perdagangan Antarabangsa dan Industri (Miti).

KLANG: The Port Klang Free Zone (PKFZ) has shown improvement in terms of the number of investments, jobs provided and total cargo moved.

According to statistics released together with the PKFZ chronology yesterday, the zone has shown a 30% increase in proposed investments over the past six months from RM720mil to RM916mil.

This figure is derived from an increase of 18 clients from 40 to 58 and has led to greater rental revenue and the creation of 687 more jobs.

“I can still remember when I first set foot in the area. People said this was a ghost town,” Transport Minister Datuk Seri Ong Tee Keat said during a press conference here yesterday.

As for the total cargo moved, there was a growth of 6,668 TEUs (container units) and an increase of about 227,000 freight weight tonnes over the past six months.

Ong, who fielded questions about the chronology, said it was in this context that allegations of the RM4.6bil soft loan for PKFZ being wasted were off-target.

“Whether or not the project was handled professionally, cost-effective or exorbitant, that is what I’ve been harping on and it is what will appear in the PriceWaterhouse-Coopers (PWC) report,” Ong said.

PWC had been appointed by the Port Klang Authority (PKA) in October to audit the PKFZ project.

Ong said people sometimes hit at the wrong target and that the argument that all the money was given out without any returns being realised was inaccurate.

“Collection of rental for the leasing of buildings obviously gives returns.

“However, the cost of the interest is indeed a big burden to the Government,” he said.

PKA general manager and chief executive officer Lim Thean Shiang said the RM4.6bil was given in intervals of 10, 15 and 20 years.

Asked to clarify whether the amount of interest being paid would be in the range of RM1.3bil, Lim said that the interest rate was 4% per annum over 15 years.

Lim was also asked why events surrounding the entry and exit of Jebel Ali Free Zone in the PKFZ project was not included in the chronology.

To this, Ong said it would be in the PWC report as it fell in the area of project governance.

Lim also clarified that Jebel Ali and PKA had terminated their agreement mutually after both parties realised that Malaysian policies would not allow Jebel Ali to manage PKFZ the way it wanted to.

The PKFZ was set-up in a joint venture with Dubai-based Jebel Ali Free Zone International (Jafza).

KLANG: The Port Klang Free Zone (PKFZ) has shown improvement in terms of the number of investments, jobs provided and total cargo moved.

According to statistics released together with the PKFZ chronology report Sunday, the free trade zone has shown a 30% increase in proposed investments over the past six months from RM720mil to RM916mil.

This figure is derived from an increase of 18 clients from 40 to 58 and has led to greater rental revenues and the creation of 687 more jobs.

As for total cargo moved, there was a growth of 6,668 20ft equivalent units (TEUs) and an increase of about 227,000 freight weight tonne over the past six months.

Transport Minister Datuk Seri Ong Tee Keat, who fielded questions about the chronology, said it was in this context that allegations of the RM4.6bil soft loan for PKFZ being wasted were off-target.

“Whether or not the project was handled professionally, cost-effective or exorbitant, that is what I’ve been harping on and it is what will appear in the PriceWaterhouseCoopers (PWC) report,” Ong said.

PWC had been appointed by PKA in October to audit the PKFZ project.

Ong said people sometimes hit on the wrong target and that the argument that all the money was given out without any returns being realised was inaccurate.

“Collection of rentals for the leasing of buildings obviously gives returns. However, the cost of the interest is indeed a big burden to the government,” he said.

PKA general manager and chief executive officer Lim Thean Shiang said the RM4.6bil was given in intervals of 10, 15 and 20 years.

When asked to clarify that the amount of interest being paid would be in the range of RM1.3bil, Lim said it was adding that the interest rate was 4% per annum over 15 years.

Lim was also asked why events surrounding the entry and exit Jebel Ali Free Zone in the PKFZ project was not included in the chronology.

To this, Ong said it would be in the PWC report as it fell into the area of project governance.

Lim also clarified that Jebel Ali and PKA had terminated their agreement mutually after both parties realised that Malaysian policies would not allow Jebel Ali to manage PKFZ the way it wanted to.

PORT Klang Free Zone Sdn Bhd (PKFZ), which manages and markets the RM4.6 billion free zone in Pulau Indah, Selangor, has begun a campaign to allay negative perceptions about it and its operations.

It is in talks with potential investors and working with trade associations to win them over after being recently hit by controversies surrounding the project, a senior PKFZ official said.

Critics of the project had questioned the project’s development cost which had ballooned from an original estimate of RM100 million to RM4.6 billion, including land acquisition.

“When investors ask me about the controversies (involving the cost of developing the project), I ask them whether they are a politician or a businessman … because invariably a businessman will see the viability of the development,” PKFZ general manager for business development Chia Kon Leong told Business Times yesterday.

He was speaking after a visit by the Public Accounts Committee (PAC), which is investigating the PKFZ project’s operations following recent controversies.

A 16-member delegation comprising members from the Audit Department, the Finance Ministry and PAC headed by Datuk Shahrir Abdul Samad, had toured the PKFZ site earlier.

Shahrir, after the meeting, questioned why a provision had been made in the PKFZ project for additional expenditure of 20 per cent to be factored into the RM2.8 billion development cost.

“We are curious about this 20 per cent provision.This has been factored into the RM2.8 billion development cost,” he added.

He said the Port Klang Authority, which owns the free zone, has agreed to get back to the PAC with an explanation for the provision.

Shahrir said the PAC was satisfied with explanations so far, but he added: “We are not finished with PKFZ. We will have a briefing with the Attorney General.

“Then we will look at other areas before we table a report to the Dewan Rakyat.”

“We are not a group of anti-development people. We are interested in the financial procedure. We want to know how the cost overrun occurred in a government project,” he said.

The project first raised eyebrows when PKA bought 405ha in Pulau Indah in 2002 for RM1.088 billion, or RM25 per sq ft from Kuala Dimensi Sdn Bhd.

The land purchase was followed by RM1.845 billion in costs for the development of the zone.

In July, the then zone operator Jebel Ali Free Zone Authority withdrew from a contract to manage the PKFZ.

Last month, the Transport Ministry said the government had agreed to extend a loan for an unspecified amount to PKA to help cover the cost of the project which had ballooned to RM4.6 billion.

To date, PKFZ has 32 confirmed investors, taking up 31.2ha of open land for development and investing some RM725 million into the free zone.

Chia said there are another 12 customers that have booked 98 acres for
construction.

These investors are in the process of obtaining licensing, but have not signed any agreement or put up a deposit with PKFZ.

THE Port Klang Free Zone (PKFZ) project is a fait accompli. Its physical development was completed and it started operation in November.

Hence, there is no point to go on a witch-hunt or to blame someone.

Any shortcomings should have been dealt with by the authorities and agencies at each phase of the project cycle, from feasibility study to design, tendering and construction.

All these would have been done to the highest level of professionalism, especially when it involved huge sums of money.

What is critical now is to make sure that the project is successful and viable. We have had enough of big projects that fail to perform or continue to survive only because of public funding.

I do not think taxpayers want to see it share the same fate as other failed projects.

The new management of the PKFZ, following the withdrawal of the Dubai-based Jebel Ali Free Zone Authority, should market this project aggressively to attract foreign and local investors to set up operations in the area.

The numbers provided by the port authority during its press conference on the project’s status are not impressive although it is too early to judge.

But one thing is certain. If the PKFZ is to become a cost-effective logistic and manufacturing hub to rival China and Singapore (as envisaged by its promoters), it would require all the resources it can command, including the best management and marketing skills to drive it.

The PKFZ will also have to face internal competition from hubs, such as the Iskandar Regional Development Area in Johor, where there are two major ports, and the Northern Corridor Economic Region, which is the hinterland of Penang port. Both hubs are also vying for foreign and local investors.

The government has provided a soft loan of RM4.6 billion to the Port Klang Authority to enable it to meet its financial obligations under this project. This is a necessary but not sufficient condition for its success.

The new management must assume responsibility for its success, otherwise we will be throwing good money after bad.

KLANG: Kos bagi projek pembangunan Zon Bebas Pelabuhan Klang (PKFZ) di Pulau Indah, Selangor meningkat kepada RM4.632 bilion selepas Lembaga Pelabuhan Klang (LPK) memutuskan untuk memajukannya serentak bagi keseluruhan kira-kira 400 hektar kawasannya.

Kementerian Pengangkutan dalam kenyataannya menjelaskan, mulanya PKFZ dicadangkan untuk dilaksanakan dalam dua fasa membabitkan sebahagian tanah seluas kira-kira 200 hektar dengan kos pembangunan dianggarkan sebanyak RM400 juta.

Bagaimanapun, atas nasihat Jebel Ali Free Trade Zone (Jafza) yang ketika itu bertindak sebagai pengurus zon bebas berkenaan, LPK membangunkannya secara serentak membabitkan keseluruhan 400 hektar kawasan dengan kos RM1.845 bilion.

“Selepas mengambil kira kos pembelian tanah, kos pembangunan bersama dengan kos faedah 7.5 peratus, yuran profesional 10 peratus dan kos-kos lain yang hanya dihadkan kepada 20 peratus jika digunakan, jumlah kos keseluruhan PKFZ adalah dianggarkan berjumlah RM4.632 bilion,” katanya.

Mengenai kos keseluruhan pembelian tanah, kementerian itu berkata, harga RM1.088 bilion atau RM25 sekaki persegi yang dibayar LPK kepada Kuala Dimensi Sdn Bhd (KDSB) bagi 400 hektar tanah tapak PKFZ itu adalah berdasarkan penilaian Jabatan Penilaian dan Perkhidmatan Harta selepas mengambil kira kerja-kerja prasarana yang dilaksanakan di tanah berkenaan.

Kerja prasarana itu termasuk penambakan tanah, perparitan, pembinaan jalan masuk dan jambatan, penyediaan lampu jalan, bekalan air serta bayaran kepada agensi utiliti.

Selepas mengambil kira bayaran kadar faedah 7.5 peratus kerana tempoh pembayaran kepada KDSB bagi pembelian itu dibuat dalam tempoh 15 tahun, jumlah keseluruhan kos pembelian tanah ialah sebanyak RM1.807 bilion.

Memperincikan kos pembangunan PKFZ, kementerian itu berkata, sejumlah RM1 bilion dibelanjakan bagi membina kemudahan utama merangkumi empat blok bangunan pejabat lapan tingkat untuk sewaan, 512 unit bangunan untuk industri ringan, pejabat Pihak Berkuasa Zon Bebas serta pejabat kastam dan laluan pemeriksaan, sebuah pusat pameran, tempat meletak kereta bertingkat serta bangunan keselamatan.

Sebanyak RM845 juta pula dibelanjakan bagi menaik taraf simpang masuk dan jalan raya, kerja infrastruktur elektrikal, pembinaan hotel kelas perniagaan, kerja penanaman kabel sepanjang 42 kilometer, dan kerja elektrikal lain.

Kementerian itu berkata, berikutan kos keseluruhan PKFZ membabitkan kos yang tinggi, kerajaan bersetuju meluluskan pinjaman mudah kepada LPK bagi membolehkannya membiayai kos pembangunan PKFZ dengan butirannya sedang diuruskan.

“PKFZ adalah projek nasional membabitkan penyediaan infrastruktur untuk membantu pertumbuhan kargo di Pelabuhan Klang, menjana pertumbuhan ekonomi negara, mewujudkan peluang pekerjaan dan perkhidmatan, serta aktiviti sampingan,” katanya.

Kementerian Pengangkutan juga berkata, kerajaan menghormati keputusan Jafza mengundur diri daripada perjanjian pengurusan zon bebas itu yang dimeterainya dengan LPK pada Oktober 2003. Tindakan itu bagaimanapun tidak akan menjejaskan kerjasama dan peluang perniagaan antara JAFZA dengan LPK pada masa depan.

LPK dan Jafza menamatkan kontrak pengurusan dan pentadbiran bagi zon bebas itu atas persetujuan bersama pada 18 Julai lalu berdasarkan perubahan dasar semasa syarikat berpangkalan di Dubai itu.

Projek PKFZ sebelum ini dilaporkan dikritik peserta industri logistik yang mengatakan ia berdepan risiko untuk menjadi projek gajah putih. Mereka juga mempersoalkan bagaimanapun kos pembangunannya meningkat begitu tinggi.

Turut mendapat perhatian ialah harga bagi pembelian tanah bagi tapak zon bebas itu yang dikatakan terlalu tinggi. Laporan sebelum ini menyebut, kerajaan negeri memberikan tanah berkenaan kepada Koperasi Pembangunan Pulau Lumut (KPPL) yang kemudian menjualnya kepada KDSB pada harga RM95 juta atau RM3 sekaki persegi.

INFO

PKFZ

* Konsep berdasar model Zon Bebas Jebel Ali di Dubai tetapi disesuaikan dengan persekitaran tempatan dan serantau

* Kedudukan strategik bersebelahan Westports di Pulau Indah

* Pembangunan di kawasan 400 hektar dengan kemudahan bercampur.

* Beroperasi November 2006

* Sebanyak 30 syarikat dalam dan luar negara menyertainya.

PORT KLANG: Port Klang Free Zone aims to have an 80 per cent occupancy rate, equivalent to housing between 650 and 700 companies, by 2012.

However, PKFZ, after more than nine months in operations, has only signed up 30 companies, or a 12 per cent occupancy rate.

It has attracted investments of more than RM700 million, comprising customers taking up 16 units of light industrial units, 30.8ha of open land, and 449 sq m of office space.

PKFZ business development general manager Chia Kon Leong said: “When our customers sign up with us, they have the option to take up more land. The actual numbers will be much more once they exercise the option.

“Besides, we are also in talks with other companies. The take-up rate will be fast after the first two years.”

To achieve the goal, Chia said PKFZ would go on an aggressive promotion.

“Twenty per cent of our expenses will go to marketing and promotions. Our annual working capital is between RM12 million and RM16 million. We are working to be operationally self-sustaining in three years.”

Chia said the company expected to generate RM80 million when it hit the 80 per cent occupancy rate.

However, he did not say when PKFZ would recover its multi-billion ringgit investments.

He said there would be economic and spillover benefits when PKFZ became a success.

“When we hit our 80 per cent occupancy rate in 2012, we can expect to generate between 25,000 and 30,000 jobs.”

He said the exit of Jafza International would not affect its operations and goals.

“Port Klang Authority has the capability to do it (manage PKFZ).

“We have Malaysians who are capable of doing it.”

PKA, which owns PKFZ, signed a 15-year contract with Jafza International in 2004 to manage and market its free zone.

Under the agreement, Jafza International was to partner PKA in conceptualising the development and marketing of PKFZ.

These included management, administration, marketing and sales.

However, last month Jafza International, operator of Dubai’s Jebel Ali Free Zone, pulled out of the 15-year contract.

Jafza, which had signed a 15-year agreement with the Port Klang Authority (PKA) to manage the PKFZ, pulled out because of changes in the company’s policy.

“The decision was made based on changes to Jafza’s current policy, which required it to only manage a free zone as an equity holder,” the ministry said in a statement yesterday.

The PKFZ was modelled on the Jebel Ali Free Zone in Dubai, whose port ranks ninth in the world in terms of container traffic. A management agreement between Jafza and PKA to manage the new free zone on Pulau Indah was inked on Oct 24, 2003. Both parties agreed to terminate their contract on July 18.

Construction work on PKFZ was completed on Oct 31 last year and operations commenced a month later. To date, it has 30 investors with a total investment of RM725 million.

In saying the government respected Jafza’s decision to quit the PKFZ, the ministry said the move would not affect future co-operation and business opportunities between Jafza and the PKA.

PKA will continue to manage PKFZ via its subsidiary, Port Klang Free Zone Sdn Bhd.

PKA has also set up a one-stop centre for investors.

To further promote the PKFZ, PKA will participate in overseas trade missions, seminars and exhibitions to attract investors.

Additionally, co-operation will also be increased with the Malaysian Industrial Development Authority and Malaysia External Trade Development Corporation as well as international marketing firms in Holland, India and China to bring the PKFZ into the European, Indian and China markets.

“PKA is confident PKFZ will achieve 80 per cent occupancy in five years and create 25,000 to 35,000 jobs.”

THE RM4.6 billion Port Klang Free Zone (PKFZ) project is facing criticism, with players in the logistics sector saying that the 405ha facility in Pulau Indah risks becoming a white elephant.

PKFZ is owned by the Port Klang Authority (PKA).

Port Klang Free Zone Sdn Bhd’s (PKFZSB) newly-appointed general manager of business development, Chia Kon Leong, said as manager and marketeer of PKFZ, the company was working overtime to make sure that the free zone is a success.

“PKFZ will not be a white elephant as has been said of Westports and Port of Tanjung Pelepas (PTP) in the past (when they were newly set up). Jafza International (Jafza) took about 10 years to get its (Jebel Ali) free zone going, and today investors are queuing to get in. With our free zone better positioned, our journey (to success) will be shorter,” said Chia via the short message service.

Jafza is operator of the Jebel Ali Free Zone but the company recently pulled out of a 15-year contract to manage PKFZ, citing a change in business strategy.

Critics of the project, however, have raised numerous issues, with some saying that it is overly ambitious. It comprises building 512 warehouses of 5,487 sq ft each, 2,000 covered parking bays, four eight-storey office buildings, a three-storey exhibition centre and a four-star hotel.

They also questioned the project’s development cost which has ballooned from an original estimate of RM100 million to RM3.6 billion.

“How did they (PKA) decide to invest that amount (RM3.6 billion)? Why 512 warehouses? Did PKA conduct a feasibility study to determine what type of infrastructure would be required before starting construction? As it is, the take-up rate for space at PKFZ remains low,” an industry source told Business Times.

The source pointed out that other free trade zone operators in the country usually build their facilities based on demand to reduce risk.

“For example, PTP will only develop the land in its Pelepas Free Zone when there is investment.

“To date, the port has spent some RM300 million to develop infrastructure in Pelepas Free Zone which is similar in size to PKFZ,” the source added.

Eyebrows were first raised when PKA bought the land in 2002 for RM1.05 billion or RM25 per sq ft from Kuala Dimensi Sdn Bhd, a subsidiary of Wijaya Baru Global Bhd, as many said the land was over-priced.

It has been reported that Kuala Dimensi bought the land in 1999 from the Pulau Indah Malay Fishermen Cooperatives for RM95 million or RM3 per sq ft.

Concerns were also raised over the government body’s move into property
development and free zone operations.

PKA further infuriated the industry with its decision to appoint Kuala Dimensi as a turnkey contractor to develop the PKFZ.

According to sources, Kuala Dimensi had issued bonds to finance the development costs, but is now having difficulty repaying its first bond payment totalling some RM570 million, which is due this year.

“The Government initially approved a cost of RM100 million to develop PKFZ, after which any additional cost had to be approved first by the Ministry of Finance. However, Kuala Dimensi has flagged a RM3.6 billion in cost overruns since starting the project in 2003,” said a source close to the matter.

“About one-and-a-half months ago, the company had asked the Government for a soft loan amounting to RM3.6 billion, being the sum spent to develop PKFZ.

“It is understood that the Government has approved it, which brings the total project cost to RM4.6 billion, including for land acquisition,” the source added.

Since its soft launch in November last year, PKFZ has attracted RM468.3 million worth of investments from six companies for prepared land to build manufacturing facilities, eight companies for the light industrial or warehouse units and seven companies for the leased business complex.

Norway’s Aker Kvaerner, Salarium Argentum Inc and Pantech Group Holdings Bhd are among the companies that have or are setting up their base there.

However, industry executives are still not so optimistic.

“Even if they get the investors, how are they going to recover the RM4.6 billion spent? Now they (PKFZ) are probably giving very low lease rates just to fill up space, sparking a price war among free trade zone operators in the country,” said one industry source.

Northport (Malaysia) Bhd managing director and chief executive officer Datuk Basheer Hassan Abdul Kader said so far, Northport has yet to get much benefit out of the development of PKFZ, which is situated in close proximity to Westports.

He said instead, the project might pose a threat to Northport’s own free commercial zone.

“So far, we are competitive (in terms of rates offered among free zones), but we are watching (with the entry of PKFZ),” he said at a media workshop on Thursday.

IN A surprise move, Jafza International, the operator of Dubai’s Jebel Ali Free Zone, has pulled out of a 15-year contract to manage the Port Klang Free Zone (PKFZ), citing a change in business strategy.

Jafza, in a statement yesterday, said it had given notice of termination to the Port Klang Free Zone Authority (PKFZA), the body in charge of PKFZ, 12 years short of its contract expiry.

PKFZ, a RM4 billion government initiative, is meant to be a magnet for foreign investments. It is touted as the first of its kind where investors can carry out manufacturing activities.

Free trade zones are special areas where investors are normally given incentives such as tax breaks and undergo less red tape.

Jafza said it is now mainly interested in free zone projects in which it can retain operational control as an equity stakeholder.

PKFZ held a soft launch in November last year. An official opening was expected to be held in the first quarter of this year, but this has since been delayed.

On Tuesday, Port Klang Authority (PKA) general manager Datin O. C. Phang said the arrangement between PKA, the regulator of PKFZ, and Jafza had not changed.

This was despite the departure of Jafza representative Noel Gulliver in April, who was called back to take care of Jafza’s interests elsewhere.

Sources close to the matter told Business Times that Jafza had decided to withdraw as it seeks to focus more on projects around the world in which it has stakes.

PKA fully owns PKFZ.

“As it did not have a stake in PKFZ, the project became its lowest priority,” a source said.

The source added that Jafza had changed its general manager three times in the last three years.

It is understood that both parties will not seek compensation and have agreed to part amicably.

Jafza had originally signed the agreement with PKFZ in October 2004 to manage and market the free zone.

“It is a mutually acceptable decision and Jafza can (still) offer its marketing services if it wants to,” Phang said.

Phang is also the chairman of PKFZ.

“As far as we are concerned, we can manage on our own as we have capable Malaysians who have experience with (developing and marketing) free zones,” she added.

Jafza said it will work with PKFZ to ensure a smooth handover of management responsibility at the development.

PKFZ involves an area of 405ha in Pulau Indah, Port Klang.
Jafza’s role as operator and manager of PKFZ was much publicised given its success with the Jebel Ali Free Zone.

Plans were under way for Jafza to promote PKFZ to its existing clients in Jebel Ali.