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).

KUALA LUMPUR: Hasil penemuan siasatan berhubung kronologi peristiwa yang mendakwa berlaku penyelewengan membabitkan pelaburan bernilai RM4.6 bilion bagi projek Zon Bebas Pelabuhan Klang (PKFZ), akan diumumkan bulan ini.

Perkara itu disahkan Menteri Pengangkutan, Datuk Seri Ong Tee Keat, semalam yang menjelaskan siasatan bagi aspek berkenaan sudah memasuki peringkat akhir iaitu proses membuat rumusan.

Bagaimanapun, masih belum ada sebarang tempoh pengumuman ditetapkan mengenai siasatan bagi status kewangan projek itu yang dilakukan firma perakaunan dan percukaian global, PricewaterhouseCoopers.

Mengulas mengenainya, Ong berkata, siasatan tidak dapat disiapkan dalam tempoh diminta kementeriannya kerana masih belum mendapatkan keterangan daripada beberapa individu yang pernah terbabit dengan entiti itu (PKFZ)

“Keterangan belum diperoleh kerana difahamkan individu itu tiada di dalam negara. Jadi, proses mengambil keterangan mereka tidak dapat dilakukan dan secara tidak langsung siasatan juga tergantung.

“Semua aspek siasatan mengenai status kewangan sudah dilakukan, cuma ini (mengambil keterangan daripada beberapa individu) saja belum. Bagaimanapun, saya jamin ia tidak akan mengambil masa lama,” katanya di sini, semalam.

Beliau berkata demikian pada sidang media selepas merasmikan persidangan bertajuk `Kemalangan Jalan Raya, Cabaran Kepada Bidang Perubatan’ anjuran Hospital Universiti Kebangsaan Malaysia (HUKM) di sini, semalam.

Kerajaan mengarahkan siasatan penuh terhadap projek di Pulau Indah itu berikutan dakwaan wujudnya penyelewengan dalam pelaksanaan PKFZ bernilai RM4.6 bilion, sekali gus menyebabkan projek itu gagal dan menjadi `gajah putih’.

Pembangunan itu menimbulkan kontroversi apabila projek yang pada mulanya dikatakan hanya bernilai RM1.1 bilion meningkat kepada RM4.6 bilion serta dianugerah kepada sebuah syarikat tanpa melalui proses sepatutnya.

Sebelum ini, spekulasi tersebar mengatakan bahawa bekas Menteri Pengangkutan, Tan Sri Chan Kong Choy terbabit dengan skandal berkenaan. Beliau yang juga bekas Timbalan Presiden MCA bagaimanapun enggan mengulas mengenainya.

KUALA LUMPUR: The report on the probe into the Port Klang Free Zone PKFZ) scandal will be made public soon by Transport Minister Datuk Seri Ong Tee Keat.

Ong said the report, which had to fulfil some conditions imposed by the Finance Ministry, was now ready to be handed over to him.

“I will be receiving the report soon together with the chronology of events which has also been completed.”

Ong said he had promised that everything would be settled by the fourth quarter of this year and that he would reveal what had been compiled.

Ong had announced in May that an audit exercise would be carried out following public outcry over the RM4.6bil “soft loan” given by the Government.

The audit was conducted by PriceWaterhouseCoopers.

Kuala Dimensi, a subsidiary of Wijaya Baru Global Bhd, is the turnkey contractor for the RM4.6 billion PKFZ project.

PKA said under the first agreement, it has paid Kuala Dimensi RM238 million for land acquisition.

Payments for the land acquisition were made in two tranches, with the first totalling RM108 million in 2002 and the second totalling RM130 million in June last year.

Under the three other agreements, being payment for development work at PKFZ, PKA has paid RM480 million.

It was to pay an additional RM660 million to Kuala Dimensi this year. Of the RM660 million, RM360 million was due by June 30 and the remaining RM300 million on July 31.

However, PKA general manager and chief executive officer Lim Thean Shiang had said that it will hold the RM660 million payment to Kuala Dimensi pending the release of audit findings this week. The audit was commissioned by the Ministry of Finance and conducted by PricewaterhouseCoopers.

The total cost for PKFZ is capped at RM4.6 billion. The remaining payments will be made periodically from 2009 to 2017.

Port Klang Authority (PKA) chairman Datuk Lee Hwa Beng said the move aimed at boosting Port Klang’s image as a world-class port was gazetted by the Cabinet in August last year and was supposed to be implemented on July 1.

He said PKA decided to make sure that the shipping industry and all the related government agencies had completed their new standard operating procedures (SOPs) before its implementation.

“We are also looking at costs that might rise when the shipping community is forced to fork out money for extra storage days, especially now that prices in other areas are also rising,” he told a press conference here yesterday.

PKA general manager Lim Thean Shiang said the authority would form a committee comprising members from associations representing manufacturers, hauliers, forwarders and shippers to help them work on their SOPs so that they would be ready for the Jan 1 implementation.

Lim , who is also the newly-appointed executive chairman of the Port Klang Free Zone (PKFZ), vowed to restructure the packages offered in order to make it more inviting to investors.

He said he had no intention of spending any more money on the project and was eager to start work to make sure business there picked up.

He said although the Government had set the ceiling for the soft loan to develop PKFZ at RM4.6bil, PKA which owns PKFZ, had only used RM4.3bil, adding that no more money would be spent.

He said he did not agree with claims from certain quarters that the PKFZ project was a white elephant.

“We have a major oil company from Dubai that will move into PKFZ on July 1. I have also just come back from a trip to meet investors in Hong Kong and will be heading to Tokyo next week for the same purpose,” he told a press conference yesterday.

THE Ministry of Finance (MOF) is expected to release the findings later this week of a special audit to determine the actual cost incurred in developing the Port Klang Free Zone (PKFZ) at Pulau Indah, Selangor.

Pricewaterhouse Coopers (PwC) conducted the audit.

“We have written to the MOF. It is supposed to give us the report this week. We are still waiting for it,” said newly-appointed Port Klang Authority (PKA) general manager and chief executive officer Lim Thean Shiang at his first press conference in Port Klang yesterday.

He said he is unsure if PKA will hold a public meeting and release the findings of the audit as it has yet to determine what the terms of reference of the report entails.

But until PwC validates the PKFZ project’s cost against the deliverables, PKA will not make any payment to the turnkey contractor Kuala Dimensi Sdn Bhd, a subsidiary of Wijaya Baru Global Bhd.

Payment to Kuala Dimensi is divided into four tranches, with the second tranche payable at the end of this month.

Lim said so far payment of some RM260 million has been made to Kuala Dimensi, being the first tranche and the initial down-payment of 10 per cent for the project.

It was reported that until March 31 this year, PKA has paid RM238 million for land purchase and RM480 million for development work.

The PKFZ project has drawn criticisms from the public over its ballooning cost overruns, which grew to RM4.6 billion from an initial RM1.3 billion.

“The RM4.6 billion amount is just a ceiling (spending limit). We don’t think the project’s actual cost will surpass that,” said Lim.

Meanwhile, PwC has been appointed by MOF to conduct another audit of the 405ha facility, this time on its “feasibility and how to make it successful”, said Lim.

On the soft loans provided by the government for the PKFZ project, Lim said the government has agreed to give the loans but details of the repayment scheme are still being worked out.

“We are seeking to extend the term of the loan to 20 years and to lower the interest rate to two per cent from the government-approved four per cent,” he added.

LIM Thean Shiang is tipped to become the new general manager of Port Klang Authority (PKA), replacing Datin Paduka O.C. Phang who has not been offered an extension to her contract, which runs out in June.

Lim is slated to take over the helm of PKA, the regulator of Northport and Westports, from June 6 2008.

Little is known of the man, except that he is currently a board member of PKA.

“It is understood that the Transport Minister is positioning Lim as general manager designate for a year or so to assist in realigning the management and directions of PKA,” Century Logistics Holdings Bhd deputy managing director Dr Mohamed Amin Kassim told Business Times.

Another industry source said PKA assistant general manager (regulatory) Captain David Rajan Padman is emerging as a favourite to succeed Lim, given his experience at PKA.

“Captain David is considered most promising to succeed Lim, as the former is most qualified and capable,” said the source, who declined to be named.

Lim’s appointment comes on the heels of former Subang Jaya assemblyman Datuk Lee Hwa Beng’s appointment as chairman of PKA from April 1 2008 by the Yang Di-Pertuan Agong.

Phang has been general manager of PKA since September 1997.

She was also the first vice-president of the International Association of Ports and Harbors (IAPH) between 2005 and 2007, the first Malaysian and first woman to attain such a position in the association.

Her election as first vice-president paved the way for the first Malaysian to be elected as IAPH president in mid-2007.

She was also a past chairman of the Asean Ports Association at the regional level and the Asean Ports Association, Malaysian chapter.

Phang was appointed chairman of Port Klang Free Zone (PKFZ) by the Minister of Transport last year, shortly after Jebel Ali Free Zone, a Dubai-based free zone operator, withdrew from the management concession for the 405ha facility in Pulau Indah, Selangor.

The project is the biggest investment undertaken by PKA since it completed the privatization of all its port services in the 1990s.

However, it has drawn criticism from the public over its ballooning development cost overruns, which amounted to RM4.6 billion from an initial cost of RM1.3 billion.

His first task will be to appoint an independent auditor to check PKFZ’s financial standing to determine whether claims of waste and cost overruns are true.

Transport Minister Datuk Ong Tee Keat, who announced Lee’s appointment yesterday, said the independent audit is not meant to be a witch hunt or a probe into the individuals previously handling PKFZ’s accounts.

“There have been a lot of media reports saying the project is scandalous and a white elephant but at the moment these have not been conclusively proven.

“In order to give PKFZ a fresh start we need to carry out this audit,” Ong told reporters in Putrajaya after his ministry’s post-Cabinet meeting.

He said if the Parliamentary Public Accounts Committee wishes to conduct their own probe into PKFZ’s management and finances, the ministry and the Port Klang Authority, which owns the free zone, will cooperate.

He said he expects Lee to announce the auditor by next week.

Lee, an accountant, replaces Datuk Chor Chee Heung, who resigned on March 31. Chor, the Alor Star MP, is now deputy home minister.

Lee told newsmen that heading the RM4.6 billion free zone will be a challenging task. It has come under public scrutiny because the initial cost of the development was to be RM1.3 billion.

Lee said he resigned as chairman of Integrated Logistics Bhd on April 24 as it would present a conflict of interest with his new appointment.

PORT KLANG: An independent auditor will be appointed to go through the accounts of the Port Klang Free Zone.

Transport Minister Datuk Ong Tee Keat said the fact that the Port Klang Authority was doing so was proof that the government was transparent.

He also gave an assurance that a witch hunt was not being carried out.

Newly appointed PKA chairman Datuk Lee Hwa Beng said Price Waterhouse Coopers was the recommended auditor.

Ong said there was a misconception that the PKFZ was a white elephant.

“Some have even labelled it as an abandoned project while others are questioning its feasibility,” he told reporters after his first visit to the PKFZ here.

He said that the RM4.6 billion soft loan to the project was not a government bailout.

He said a bailout would have to be in the form of a grant which the recipient would not be required to pay back.

As of March 31 this year, he said PKA had bought the site from Kuala Dimensi Sdn Bhd for RM238 million besides paying RM480 million to develop the free zone.

He said the free zone started commercial operations in November 2006 and had so far earned RM11.8 million from operations.

When asked whether the project was viable he said he would leave it for the people to decide.

He said the project comprised 256 hectares of open land development, 512 light industry units and a 500,000 sq ft office block.

Of these, only 13 per cent of the open land had been taken up, 30 of the industry units were occupied while the occupancy rate for the office block was 1.2 per cent.

Ong said there were 47 investors in the PKFZ with investments totalling RM748 million providing 972 jobs.

He said another 46 investors were expected to sign agreements this year, bringing in a further RM614 million in investments and 830 jobs.

The next signing ceremony will be between PKFZ and Halal Development Corporation on Monday.

He said there were projections of the PKFZ creating up to 30,000 jobs and investments of up to RM6 billion by 2015.

On the Parliamentary Public Accounts Committee’s investigations into the free zone, he said PKA and PKFZ were cooperating in the matter.

On the state government’s proposal to take over the project, he said the ministry was open to all suggestions.

“We are still waiting but nothing has been put forward to us,” Ong said.

Menterinya, Datuk Ong Tee Keat, berkata kerajaan hanya menyalurkan pinjaman mudah sejumlah RM718 juta kepada PKFZ sehingga 31 Mac lalu, iaitu RM238 juta untuk pembelian tanah dan RM480 juta untuk pembangunan infrastruktur.

“Pelbagai tohmahan dibuat pihak tertentu terhadap kerajaan ketika kempen pilihan raya lalu termasuk mendakwa RM4.6 bilion untuk membiayai PKFZ sudah hilang dan dilesapkan pihak tertentu.

“Dakwaan ini tidak benar sama sekali dan kita mahu pihak terbabit menyiasat dulu maklumat secara terperinci sebelum membuat kenyataan melulu hanya semata-mata bertujuan menarik perhatian rakyat,” katanya pada sidang akhbar selepas lawatan ke PKFZ semalam.

Ong berkata, penjelasan itu juga bagi menjawab soalan yang dikemukakan Menteri Besar, Tan Sri Abdul Khalid Ibrahim pada sidang Parlimen kelmarin yang bertanyakan jumlah pinjaman mudah yang sudah disalurkan kerajaan Pusat kepada PKFZ, tetapi beliau tidak sempat menjawab soalan itu secara lisan kerana kesuntukan masa.

Ong berkata, dakwaan PKFZ adalah projek yang dibiayai Kerajaan Pusat sepenuhnya juga tidak benar kerana projek itu mendapat pinjaman mudah yang diberi secara berperingkat dan LPK bertanggungjawab memberi wang pinjaman pendahuluan.

“Saya mahu semua ahli politik berhenti memperbodohkan masyarakat dengan mendakwa projek ini dibiayai sepenuhnya Kerajaan Pusat. Tiada sebarang bantuan kewangan yang diterima PKFZ, sebaliknya semua wang adalah pinjaman mudah,” katanya.

Beliau berkata, pembelian tanah pada harga RM25 sekaki persegi dibuat selepas diluluskan Jabatan Penilaian dan Perkhidmatan Harta pada 2000 dan harga itu mencakupi pembinaan infrastruktur dan kerja tebus tanah kerana sebahagian tanah asalnya adalah laut.

“Harga yang diluluskan ini telah mengambil kira tempoh pembayaran balik tertunggak selama 15 tahun. Sudah tentulah tempoh berbeza maka kadar tanah juga berbeza,” katanya.