Question No. 1: Port Klang Authority (PKA) Chairman Datuk Lee Hwa Beng made a very revealing and incriminating admission when he came to the defence of the Transport Minister, with reference to a letter by Ong to the Prime Minister dated May 10, 2008 after it surfaced on the Internet.

According to the New Straits Times, Lee clarified that the letter on RM1.2 billion variation order by the PKFZ turnkey developer, Kuala Dimensi Sdn. Bhd (KDSB) was not Ong’s request for more money to be approved but merely a relay of the PKA board’s decision (that they needed more money) to the prime minister.

“The letter from the transport minister dated May 10, 2008 to the then prime minister was to inform the latter that the PKA board had already deliberated and approved in February 2008, the final costs of the main development agreement of the contract with the developer.”

Lee said that the PricewaterhouseCoopers audit report did not mention the May 10, 2008 letter because the issue was not with the letter but rather the PKA board’s way of deliberating on agreements.

Lee distanced himself from the way the PKA Board deliberated the agreements and approved KDSB’s RM1.2 billion variation order by declaring:

“I wish to make it clear that I was not on the PKA board in February 2008 when it wrote to the transport minister asking for the RM1.2 billion”.

Lee is right that he was not the PKA Chairman when the PKA Board approved KDBS’s RM1.2 billion PKFZ variation order in February 2008. Who was the PKA Chairman when the PKA Board approved the RM1.2 billion variation order, which was 21% higher than the original estimate of RM1 billion?

In actual fact, KDSB also claimed professional fees of RM121.592 million calculated as a single 10% of the final amount of RM1.216 billion variation order, although this was not stipulated in the PKFZ development contract, resulting the final development cost to be increased by 33%, from the original estimated sum of RM1 billion to RM1.337 billion.

The PKA Chairman in February 2008 is none other than the present MCA Deputy Finance Minister, Datuk Chor Chee Heung.

My first question is why Ong continue to support Chor to evade and avoid responsibility and accountability with the latter’s stance that he had done nothing wrong or improper and need not resign or be suspended as Deputy Finance Minister?

Question No. 2: In his 40-minute media conference in the Parliament lobby yesterday after his 8-minute Ministerial non-statement, Ong denied that his letter dated May 10, 2008 to the Prime Minister was to ask for approval for KDSB’s RM1.2 billion variation order.

This is what he said, as reported by another New Straits Times report:

“There is no need to approve the RM1.2 billion since it was part of the RM4.3 billion soft loan granted by Finance Ministry to PKFZ and approved in 2007.

“It was a decision made before my tenure as transport minister. The question of my asking for extra funds does not arise.”

My second question is how this claim of his tallies with the last paragraph of his letter to the Prime Minister dated 10th May 2008, which read:

“6. Oleh yang demikian, saya pohon pertimbangan serta kelulusan YAB Datuk Seri ke atas perkara seperti tersebut di perenggan 3(i) dan 4.”

Perenggan 3(i) and (4) referred to KDSB’s RM1.2 billion variation order.

Does Ong agree that he has been caught red-handed telling an untruth on the PKFZ scandal?

Question 3: I said yesterday that I would move a motion to refer Ong to the Committee of Privileges if he does not apologise within 24 hours for violating Standing Order 36(12) in deliberately misleading the House when he said that the Cabinet, on Oct. 2, 2002, made the decision to allow the Port Klang Authority (PKA) to purchase 1,000 acres of land for RM1.08 billion at RM25 psf based on the position of the Selangor state government that the land could not be acquired under Section 3(1)(a) of the Land Acquisition Act 1960 because PKFZ was not a public project.

This was because Ong had not referred to the Cabinet decision three weeks later on Oct. 23, 2002, that the land should be acquired by the Transport Ministry through land acquisition under Section 3(1)(a) of the Land Acqusition Act at the price of RM10.16 psf.

To be fair to Ong, I am extending the 24-hour notice to 48 hours before filing a motion to refer him to the Committee of Privileges. Is he prepared to come clean and admit that he had misled the House and had not given a full, proper and accurate account of the Cabinet decisions over the years on the PKFZ project?

No. 1: In his blog from Paris, Transport Minister and MCA President, Datuk Seri Ong Tee Keat has threatened to sue me for standing up for the public interest to get to the bottom of the RM12.5 billion PKFZ scandal. He is trying to put words into my mouth, claiming that he had been defamed. That is his business. He can do what he like, whether he wants to sue me or not.

The turnkey developer of PKFZ has also announced its intention to initiate a series of legal proceedings against Ong, the Port Klang Authority (PKA) Chairman, Datuk Lee Hwa Beng, PricewaterhouseCoopers (PwC), newspapers and others over the PKFZ scandal.

The public interest to get into the bottom of the RM12.5 billion PKFZ scandal to find out how a RM1.1 billion scandal under Datuk Seri (now Tun) Dr. Ling Liong Sik in 2002 could quadruple to RM4.6 billion under his successor, Datuk Seri Chan Kong Choy in 2007, again double to RM7.453 billion and heading towards the astronomical cost of RM12.453 billion under the watch of Ong as Transport Minister should not be blocked or buried by a pile of litigation suits.

If it takes 10 or 20 years to dispose of all the litigation that could be instituted over the PKFZ scandal, does it mean that nobody should ask any question or no answer need be given demand as to the causes and culprits of the RM12.5 billion PKFZ scandal until 2019 or 2029?

Where will Ong be in 2019 or 2029?

Is Ong going to Parliament on Monday, as directed by the Prime Minister, Datuk Seri Najib Razak, to say in his Ministerial statement that as he intends to institute legal action against me over the PKFZ scandal, there is no need for him to give any answer or accounting and that all should wait for the outcome of such legal proceedings?

This is my first question to Ong today, whether he would ever use legal action as an excuse that he need not give any accounting for the RM12.5 billion PKFZ scandal, whether in Parliament or outside?

Question No. 2: Yesterday the website http://www.malaysiafreenews.com/ carried the following posting:

“PWC’s report on PKFZ shows that the PKA’s board of director had on 5 February 2008 approved the payment of RM1.2billion to KDSB, this is inclusive of 8.5% variation cost and the initial construction of RM95million however this is not inclusive of the professional fees of RM0.12billion.

“According to the said report, this payment is RM32million higher than the estimation of 63million made by surveyor earlier. This shows that the Board of Director had approved the payment in toto as requested by KDSB, but if fails to indicate or mention whether Ong supported the payment and made suggestion that the Cabinet should pass it.

“Food for thought, the PKFZ fiasco started as early as 2004, why did Ong support the payment to KDSB, does he not have to be responsible for this?”

What has Ong to say to this question. Will there be a reply by Ong to this query in his Ministerial statement in Parliament on Monday?

Question No. 3 – In September 2006, I spoke up in Parliament and outside commending Ong for speaking out against the “leakage” and misappropriation of public funds where only RM3,000 worth of work were delivered for a RM30,000 renovation for SJKC Kung Yu in Muar.

Does Ong think that his commendable stand in 2006 to expose the “leakage” of 90 per cent or RM27,000 of public funds in a RM30,000 school renovation is sufficient to justify his failure to “investigate all” and “tell all” about the RM12.5 billion PKFZ “mother of all scandals”?

How many RM30,000 school renovation work can be done with RM12.5 billion? Answer is 416,666 such projects!

KUALA LUMPUR: The Dewan Rakyat rejected an emergency motion to have a royal commission of inquiry into the RM12.5bil Port Klang Free Zone (PKFZ) scandal, saying that the matter was not urgent.

Speaker Tan Sri Pandikar Amin Mulia, in his ruling, said the emergency motion filed by Lim Kit Siang (DAP-Ipoh Timur) under Order 18(1) fulfilled the criteria of being specific and of public interest.

However, he dismissed the application as the matter was not urgent, one of the three criteria required for an emergency motion to be debated in the House.

“A task force and two committees have already been set up to investigate PKFZ,” he said.

In his application, Lim said the Pricewaterhouse Coopers (PwC) audit report was most “unsatisfactory” as its terms of reference were restricted to “a position review” instead of a wide-ranging inquiry into how the RM1.1bil project in 2002 had ballooned into a RM12.5bil project.

At a press conference in the Parliament Lobby on Monday, Lim said the PKFZ audit report and its appendices should be immediately tabled in Parliament and given to MPs without waiting for the Public Accounts Committee (PAC) report.

Lim said the PAC report would not be ready in time before the current sitting of Parliament ends on June 30.

He said this was because the PAC would only have its third meeting on the PKFZ on Wednesday.

“She (Parliament secretary Datuk Roosme Hamzah) informed me that the PwC report and its appendices will be tabled in the House together with the PAC report,” he told the press.

Lim said it was “ridiculous” that the MPs had to wait for the PAC report, which would only be tabled at year’s end.

Transport Minister Datuk Seri Ong Tee Keat is working on turning the PKFZ project around and there was no reason for him not to confront the issue, his political secretary Simon Lim said in a statement released Monday.

“The minister has been proactive and committed to making the project work,” he said in PETALING JAYA.

He refuted Lim Kit Siang’s claims that Ong was trying to “dodge the bullet” by running away from his ministerial or parliamentary duties, reports SHAUN HO.

Simon Lim said veteran politicians should not jump the gun by making baseless accusations and casting aspersions on the minister.

“He should give due respect to those who have honoured their promises and walked the talk.”

Simon Lim said the minister had been true to his stance on transparency and accountability by releasing the PwC audit report to the public and the PAC.

The minister had also instructed the Port Klang Authority (PKA) to establish a special task force comprising lawyers, accountants and quantity surveyors to look into the findings of the audit, he said.

The minister will be making a ministerial statement on the PKFZ in the Dewan Rakyat next Monday, June 22.

Ong’s political secretary Simon Lim said his boss has been proactive and committed to making the project work.

“There is no reason for Ong not to confront the issue about the PKFZ,” he said in a statement yesterday.

Simon was responding to reports quoting DAP adviser Lim Kit Siang as claiming that Ong was running away from his ministerial or parliamentary duties concerning the PKFZ.

“His baseless assertions are merely a self-serving political gimmick,” Simon said.

Simon said veteran politicians like Kit Siang should not jump the gun by making baseless accusations and cast aspersion on the minister.

“He should learn to give due respect to those who have honoured their words and walked the talk,” Simon said.

He said that in line with the minister’s stance on transparency and accountability, the PKFZ audit report had been made public.

He added that a website www.pkfznews.com.my had been set up to answer public queries about the project.

The minister had ordered a special task force made up of lawyers, accountants and quantity surveyors to be set up by the Port Klang Authority (PKA) to look into the findings of the report, he added.

He said Ong would be making a ministerial statement on the PKFZ in the Dewan Rakyat next Monday.

A ministerial statement is an oral statement made by a minister in the Dewan Rakyat and will be made after Question Time.

Transport Minister Datuk Seri Ong Tee Keat also directed authority chairman Datuk Lee Hwa Beng to submit a copy of the report to the Malaysian Anti-Corruption Commission and the Public Accounts Committee.

The report, which was drawn up by accounting firm Pricewater­houseCoopers, was made public during a press conference by Lee in Port Klang yesterday.

In his blog posting yesterday, Ong said he had directed the authority to carry out the following:

> SEEK professional advice on the restructuring of financial obligations of the authority;

> IMPROVE and tighten governance issues at management and board levels of the authority; and

> FURTHER beef up the day-to-day management of the zone to strengthen operations and improve its financial returns.

Ong said the release of the report was only a small part of the job that needed to be accomplished.

“We need to seriously act on the findings of the report to make sure that the interest of the people are fully protected and that this Government walks the talk,” he said.

He added that his ministry was not only committed to have the report released but it was also determined to ensure that all possible remedies that were within its jurisdiction were explored.

In his blog posting on Wednesday, Ong had said he was a strong advocate for the report to be made public.

“I have advocated since April last year that the public should know the truth. It has been a long journey for me personally. It is one that is fraught with challenges and hurdles from both within and without,” he said.

Meanwhile, the Transport Ministry said in a statement yesterday that Government was confident that the facts and issues presented in the report would finally put to an end to speculations.

It said the Government also shared the deep concern of Malaysians about the costs of the project as well as its weak governance and project management as revealed in the report.

The ministry said the action to commission a position review into zone and the subsequent release of the results demonstrated the Government’s commitment to be transparent and to act on the findings in a firm manner to lessen the public’s burden.

“The Government has, through today’s action, shown that it really means to change from the old ways of governing. It demonstrates the openness and transparency espoused by Prime Minister Datuk Seri Najib Tun Razak’s People First, Performance Now administration,” it added.

The ministry would ensure that the zone became a viable project in the long term in line with the original intent of turning Port Klang into a regional transhipment hub.

It is understood that the authority is working with legal advisers and financial consultants to define the scope and parameters of the necessary actions based on the directives given by Ong.

The report is available on www.pka-report.com

The release of the report was a clear instruction from Transport Minister Datuk Seri Ong Tee Keat, said PKA chairman Datuk Lee Hwa Beng at a press conference in the PKA office here Thursday.

“I was also instructed to hand the report over to the Malaysian Anti-Corruption Commission. I’ll be there tomorrow at 8am,” he said, adding that this was because PKA does not have any investigative authority.

He cautioned that the release of the report was on certain conditions, including the media not having the authority to rely on the report to arrive at any conclusions and that PwC is not obliged to respond to any queries from other parties, as its duty of care is solely to PKA.

Lee however refused to field any questions on the details of the report and repeatedly asked reporters to view Ong’s blog for further information.

He said the report would be available online at www.pka-report.com for a period of two weeks while the appendices to the report would be available for public viewing during office hours at PKA at Jalan Pelabuhan, Port Klang until June 10.

“The appendices could not be released like the report due to its voluminous nature,” he said.

The report highlighted 20 issues concerning the project’s management and governance by the PKA.

Among them were weak project management, cost overruns and conflicts of interests:

* PKA’s failure to alert the Cabinet in a timely manner of its inability to finance the project from its internal funds following an audit report by the Auditor-General in 2004 that noted that PKA did not have sufficient funds to finance the project;

* PKA’s failure to seek the advice of the Attorney-General while not complying with certain Finance Ministry regulations;

* Potential conflicts of interests arising from the involvement of parties who had prior association with either the land used to develop PKFZ or the turnkey developer, Kuala Dimensi Sdn Bhd (KDSB);

* Awarding of the PKFZ development contract to KDSB before a project masterplan was finalised;

* PKA’s projections that it would be in a cumulative cash deficit position in 2012 and would not be able to repay the Finance Ministry soft loan instalments on time;

* PKFZ having a low occupancy rate of 14% which is not generating sufficient revenue to cover its operating expenses;

* PKFZ Sdn Bhd incurring losses since its incorporation and having negative shareholder’s funds as at Sept 30 last year; and

* The possible breach of Treasury regulations when the Transport Ministry issued letters of support which could be construed as a guarantee that PKA would meet its obligations on a full and timely basis. Such letters should have been approved by the Finance Ministry.

Earlier report:

PUTRAJAYA: The Cabinet, which discussed the controversial Port Klang Free Zone (PKFZ) project yesterday, is seeking additional information on what had occurred, Prime Minister Datuk Seri Najib Tun Razak said.

“Yes, we did discuss and we are collecting additional information on several matters that had happened,” he told reporters here yesterday.

Transport Minister Datuk Seri Ong Tee Keat said in his blog that after deliberating on the issue for the third time, the Cabinet finally gave the green light for the PKFZ report to be released in its entirety.

Ong said that the Cabinet, at its weekly meeting yesterday, agreed that the Government needed to be transparent on the issue.

He said the Port Klang Authority (PKA) was directed to release the report “as soon as everything is in order”. It is believed his Ministry has to come up with certain additional information before a full report can be released.

The PKFZ issue, Ong said, had been played up and used by the Opposition as their political tool since a few years ago.

“I am glad that the Prime Minister and my Cabinet colleagues share my aspirations that our Government should be transparent and deal with the issues of the day. Sweeping problems under the carpet is not an option,” he wrote in his blog www.ongteekeat.net.

He said that with the release of the report, the Government has proven that it has nothing to hide and that the new administration was prepared to reveal the truth as well as take appropriate action to correct any wrong.

“The onus is on PKA,” he said, adding that any enquiry on when the audit report could be made public should be directed to the PKA.

Ong was speaking to reporters after the launch of AirAsia Bhd’s Langkawi-Singapore route here yesterday. The minister had on April 29 given PKA chairman Datuk Lee Hwa Beng one week to release the audit report.

PKA did not meet the Wednesday deadline. Lee had subsequently issued a statement explaining that he could not meet the deadline as he had to seek PKA board’s approval on the terms and conditions imposed by PwC for the release of the report.

Lee said PKA had to resolve the technical issue before the report could be made public. As of yesterday, PKA had not given any indication when the report would be released.

PKA had commissioned PwC to do an audit on PKFZ last year after a public outcry over the huge cost overrun, controversial land deals, and the involvement of several prominent politicians.

PKA has had to rely on a RM4.6 billion standby facility from the government to redeem several tranches of bonds issued to finance the project. The cost of the project is said to have ballooned to over RM10 billion.

Writing in his blog www.ongteekeat.net after yesterday’s cabinet meeting, Ong also said the PricewaterhouseCoopers (PwC) report should be made public in its entirety.

“I am made to understand that the PwC report is ready, and in keeping with my promise earlier, it should be made public in its entirety. I have pledged to ensure transparency on this issue and I intend to keep to my words,” he wrote.

Ong said he had extended the tenure of PKA chairman Datuk Lee Hwa Beng, whose one-year term had expired on March 31, 2009.

He also said there was a delay in completing the report due to technical issues, which include the declassification of key government documents relating to the investigation.

“Now that the report is ready, it is only natural that PKA, which commissioned the report, release the findings, after which, I contemplate submitting the report to the MACC and the Public Accounts Committee,” said Ong. MACC is the Malaysian Anti-Corruption Commission.

Separately, Lee said in a statement that he would release the report within a week as directed.

“I will facilitate the process and ensure that the matter is properly resolved so that PKFZ can move forward without the heavy baggage of the past,” he said.

Lee denied that there were attempts by PKA or the Transport Ministry to delay or to stop the release of the report.

“It is the PKA that commissioned the report and likewise the onus to declassify the documents also rested with our port authority. I think the delay has not been significant given the nature and volume of the documents involved,” he said, adding that PKA is committed to accountability and that the public has the right to know the truth.

The Edge business and investment weekly reported this week that the cost of the controversial project could eventually run to RM8 billion and not RM4.6 billion as stated by former Transport Minister Datuk Seri Chan Kong Choy in 2007. The original cost of the project when it was first mooted in 2002 was RM2.3 billion.

The weekly said PKA, which issued bonds to finance the project, will not be able to recoup its money even with the financial support of the federal government, which stepped in two years ago to provide “guarantee” to bondholders that they will be paid. The federal government also undertook to provide soft loans to PKA.

The Edge also criticised the delay in releasing the PwC report, which was completed more than two months ago.

On Sunday, in reaction to The Edge article, Ong slammed the weekly (a sister publication of this newspaper) for suggesting that he was delaying release of the report.

The PKFZ saga started with the sale of land to PKA by Kuala Dimensi Sdn Bhd (KDSB) in November 2002. KDSB, which is 70% owned by Datuk Seri Tiong King Sing who is also the MP for Bintulu and Barisan Nasional Backbenchers Club chairman, sold 999.5 acres of land in Pulau Indah, Selangor to PKA for RM1.09 billion or RM25 per square foot (psf).

KDSB had acquired the land from Pulau Lumut Development Cooperative Bhd for only RM95 million or RM3psf. The Attorney-General later opined that the land could have been acquired for a ‘public purpose’ under the Land Acquisition Act at RM10psf instead of RM25psf.

What made the project even more controversial was that PKA also appointed KDSB to develop the PKFZ and KDSB appointed a related company Wijaya Baru Global Bhd to be the main sub-contractor. Tiong is a shareholder and director of Wijaya Baru, which in turn controls KDSB.

So, essentially Tiong sold the land to PKA at a hefty profit and then also benefited from being given the development and management rights as well as the right to be the main sub-contractor.

Critics had questioned the viability of the mega project and had said that if it was viable, Tiong and his business partners, who included some Umno politicians, would have done it themselves since they owned the land.

The project was first conceived under then Transport Minister Tun Dr Ling Liong Sik and carried through by his successor Chan, who many believed was dropped from last year’s general election over his handling of the matter.

Also under scrutiny was the action of then PKA general manager O C Phang and the PKA board for agreeing to what many felt was a project that was carried out in a way that put the port authority at great financial risk.

When Lee was appointed PKA chairman in March last year, he got the support of Ong to commission PwC to do a thorough investigation into how the port authority got entangled in this financial mess. The accounting firm took around six months to carry out its work.
This article appeared in The Edge Financial Daily, April 30, 2009.

PETALING JAYA: There was no attempt by the Transport Ministry or Port Klang Authority (PKA) to delay or stop the release of the audit re-port on the Port Klang Free Zone (PKFZ).

PKA chairman Datuk Lee Hwa Beng said Minister Datuk Seri Ong Tee Keat had stressed to the PKA that the report had to be released quickly with all relevant documents declassified to make full disclosure to the public.

“It was the PKA that commissioned the report and likewise the onus to declassify the documents also rests with our port authority.

“This has now been accomplished and I think the delay has not been significant given the nature and volume of the documents involved,” Lee said in a statement.

He said he would facilitate the process and ensure that the matter was properly resolved so that the PKFZ could move forward without the heavy baggage of the past.

Now that the report on the PKFZ by auditing firm PriceWaterhouseCoopers (PWC) was completed, the PKA and PWC were now working on the final details for the report to be made public.

“I wish to thank the relevant ministries, government bodies and agencies for the cooperation extended to the PKA and PWC in this very tedious exercise.

“We at the PKA remain steadfast to the commitment that the Government is accountable to the people and that they have the right to know the truth,” Lee added.

In December, Ong and the PKA held a press conference to release a chronology for the PKFZ project together with statistics showing how the PKFZ had grown.

Ong had then said that the PWC report would address whether the project was handled professionally, and if it was cost-effective or exorbitant.

He had also announced in May last year that an audit exercise would be carried out following a public outcry over the RM4.6bil “soft loan” given by the Government to revive the PKFZ.

PETALING JAYA: The audit report on the Port Klang Free Zone (PKFZ) is ready and the Port Klang Authority (PKA) has been given one week to make it public. Transport Minister Datuk Seri Ong Tee Keat said he would contemplate submitting the report to the Malaysian Anti-Corruption Commission and the Public Accounts Committee after its release.

Writing this in his blog (ongteekeat.net), the minister said that by releasing the audit report by PriceWaterhouseCoopers he would be keeping a pledge he made earlier.

“I have pledged to ensure transparency on this issue and I intend to keep my word,” he wrote.

He also announced that he had decided to extend the services of PKA chairman Datuk Lee Hwa Beng whose term of office expired on March 31.

“One of his key priorities now is to ensure the release of the report,” he said.

Ong, who is the MCA president, said that he had directed the PKA last year to commission an independent and credible firm to look into the PKFZ controversy.

“The delay in completing the report is due to several technical issues, including the declassification of key government documents related to the investigations,” he explained.

Now that the report was ready, it was only natural for the PKA, which had commissioned the report, to release the findings.

On Sunday, Ong hit out at his critics, saying that it was grossly unfair for some “snipers”, including certain individuals from certain media, to ignore that declassification had to be sought before the report could be released.

The 405ha PKFZ transshipment hub has been dogged by controversy ever since it was revealed that its original development cost had ballooned from the original less than RM2.5bil to RM4.6bil.

Former Transparency International chairman Tan Sri Ramon Navaratnam commended Ong for handling the situation very well, “by giving due respect to the PKA and allowing it to release the report.”

He said that Ong, by ordering the release of the report, was also ensuring that public interest was upheld.

“It is right and proper that he submits the report to the MACC and Public Accounts Committee after it is released,’’ he said.

If there was any wrongdoing, those concerned must be brought to book, Navaratnam added.