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.

KUALA LUMPUR: Wijaya Baru Holdings Sdn Bhd chief executive officer Datuk Seri Tiong King Sing said he will be suing Port Klang Authority (PKA) board chairman Datuk Lee Hwa Beng and several others within a few weeks over the Port Klang Free Zone (PKFZ) audit report.

Nanyang Siang Pau reported on the front page of its evening edition last night that Tiong would also be suing auditing firm PricewaterhouseCoopers (PWC) Advisory Services Sdn Bhd and several media companies.

Tiong told the daily that Kuala Dimensi Sdn Bhd had appointed a team of lawyers to study the audit report to draft the suit. Tiong is a 70% shareholder of Wijaya Baru Holdings, which is the sole proprietor of Kuala Dimensi Sdn Bhd, the turnkey developer of PKFZ.

Speaking after launching a Buddhist project in Petaling Jaya yesterday, Tiong said that he decided to sue Lee and not PKA.

Tiong also challenged Lee to use his money and not PKA funds to defend himself.

Tiong, who is also Bintulu MP and Backbenchers Council chairman, warned Lim Kit Siang (DAP – Ipoh Timur) that he may be sued too.

Kuala Dimensi also took up full page advertorials in Sin Chew Daily, Nanyang, China Press and Guang Ming Daily to explain its position.

It said the PWC’s report, which was incomplete, had tarnished the company’s reputation.

When contacted, Lee said: “I have to wait for the suit and will inform my lawyers to file a defence. Whatever I did is on behalf of PKA and for the good of taxpayers.”

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.

PKA chairman Datuk Lee Hwa Beng said PwC had agreed in principle to the release of the report to the public but needed indemnity from the port authority.

Lee was speaking to reporters after a PKA emergency full board meeting to discuss the issue here yesterday.

Lee added that the PKFZ report was expected to be released after the sole issue at the PKA level was resolved.

It was reported earlier that Lee had written to PwC on April 30 to seek its consent following the instruction by Transport Minister Datuk Seri Ong Tee Keat to release the report within seven days.

However, PwC replied on May 4 that consent would be given subject to certain terms and conditions.

Port Klang Authority chairman Datuk Lee Hwa Beng said the report could only be released with the consent of its auditor PricewaterhouseCoopers (PwC).

He said in a statement today that PwC had made it clear that the said report is confidential to Port Klang Authority and must not be reproduced or distributed, “in whole or in part, to any other party in any way without prior consent of PricewaterhouseCoopers Advisory Services Sdn Bhd.”

Lee said he had earlier written to PwC on April 30 to seek consent to publicly release the report following the instructions of Transport Minister Datuk Seri Ong Tee Keat to release the report within seven days.

“PwC replied on May 4 that consent will be given subject to certain terms and conditions. On Tuesday I met with representatives from PwC and have decided to call for an emergency Board meeting to seek the Board members’ approval on the terms and conditions for the release of the report.

“In light of this, I’ve informed the Transport Minister that I have to resolve this technical issue before the report can be made public despite the deadline given by him,” he said.

Lee gave his assurance that the matter would be sorted out as soon as possible as it is his responsibility to ensure that the full reports, together with the declassified documents are officially released to the public.

“I am concerned with the leaks to the press and wish to state that I and my office play no part in it,” he said.

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.

Why hadn’t the MCA President and Transport Minister Datuk Seri Ong Tee Keat raise with Datuk Seri Najib Razak, who had become Finance Minister since September last year when he was Umno Deputy President, the issue of the declassification of certain letters and correspondence in relation to the Port Klang Free Zone (PKFZ) project so that the Pricewaterhouse Cooper (PwC) audit report on the PKFZ scandal could be made public?

Or was he just afraid to discuss the issue with Najib in the past six months until he got the nod from Najib?

This is clearly not a relationship between political equals but between a political master and an inferior!

These are the thoughts of anyone who read yesterday’s Edge Malaysia online report, headlined “Najib to hear out Tee Keat on PKFZ declassification”, viz:

Prime Minister Datuk Seri Najib Razak will hear out what Transport Minister Datuk Seri Ong Tee Keat has to say about the proposed declassification of certain letters and correspondence in relation to the Port Klang Free Zone (PKFZ) project that has hogged the limelight for its huge cost over-run.

“I don’t know. I’ll have to check with him (Ong) first”, Najib said when asked to comment on Ong’s remarks on Sunday that the delay in releasing the PKFZ audit report, conducted by PricewaterhouseCoopers (PwC), was caused by another ministry in declassifying certain letters and correspondence.

Ong had told reporters that his ministry was not the cause of the delay in releasing the PwC report but another ministry. He had said that PKA had been seeking the declassification of letters and correspondence pertaining to the PKFZ since the beginning of the year from the other ministry and still awaiting the approval.

It has been reported that the other ministry is believed to be the Ministry of Finance.

The current issue of The Edge weekly reports that the PKFZ project can cost up to RM8 billion instead of RM4.6 billion due to the higher cost of funds and unfavourable financing terms. It is said that the project to build a transshipment hub started off initially with a budget of less than RM2.5 billion.

Najib took over the Finance Ministry post on 17th September last year, and Ong’s failure to raise the issue of the publication of the PwC report on the PKFZ scandal, involving the declassification of documents under the Official Secrets Act, in the past six months is a sad reflection on the MCA President’s commitment to accountability, transparency, integrity and good governance as well the seriousness of his much-touted pledge to “tell all” to Malaysians about the PKFZ scandal.

Now everyone is asking 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 when Datuk Seri Chan Kong Choy took over the Transport Ministry and now to RM8 billion under Ong.

Can Ong continue to put up the public pretense that he is not directly and personally responsible to honour the pledge he had publicly given in April last year that Malaysians would be told the entire truth about the PKFZ scandal?

PUTRAJAYA: Datuk Seri Ong Tee Keat has criticised a local business weekly for not verifying facts that painted a wrong picture of the Transport Minister and investigations into the operations of the Port Klang Free Zone (PKFZ).

Ong said that since Saturday, he had received many telephone calls from the press over the article, which among others claimed that the cost for the PKFZ project had ballooned to RM8bil from the initial RM4.6bil announced and that the minister was responsible for delays in the report on the investigations being made public.

He said he stood by his announcement in December last year that the investigations conducted by the Port Klang Authority (PKA) through auditing firm Pricewaterhouse-Coopers (PwC) would be made public once the report was completed.

However, 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.

“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,” he told a press conference after launching the Indian Muslim Business Directory at the Malaysian Indian Muslim Congress’ (Kimma) 33rd delegates conference yesterday.

Ong said it did not make sense to claim that he had asked for the report not to be released, as he was the one who directed the port authority to conduct the investigations into the project and make the findings public.

He said the ministry had hoped that the report on the investigations would give the zone a fresh start while helping to look into the areas of concern.

“I am also waiting for the port authority to release the report because I am contemplating submitting the report to both the Malaysian Anti-Corruption Council and the parliament’s Public Accountability Committee,” he said.

“Prior to this, it was held back for us to seek declassification of certain documents deemed relevant to the entire report,” he told reporters after launching the Technical Resource And Internship Network programme at Wisma MCA here yesterday.

He said PKA was at liberty to release the report because it commissioned the report and not his ministry.

“So it is only right for us to refer back to PKA to do the needful,” he said.

Ong said there was no need to submit the report to the Cabinet as it had nothing to do with it.

He said he was briefed about the report but stressed there was “no intervention” on his part.

“When I said it must remain independent, I mean it – independent,” he said.

The PKA commissioned Pricewaterhouse Coopers in October to come out with a report following various accusations made against the PKFZ project.

Meanwhile, it had been pointed out that a report in The Star yesterday, stating Ong’s ministry was waiting for the classification of certain documents for the Pricewaterhouse Coopers report, was inaccurate.

Ong had actually said that the report was previously delayed because the PKA was waiting for the documents to be declassified.