First PKFZ letter of support was not government guarantee Ling tells PAC — July 15, 2009

July 30, 2010

JULY, 30  —  On July 15, 2009 The Malaysian Insider published the following story by Asrul Hadi Abdullah Sani .

Former transport minister Tun Dr Ling Liong Sik told the Public Accounts Committee (PAC) today that the first letter of support for the Port Klang Free Zone (PKFZ) was not a government guarantee and had no financial implications on the government.

“According to his (Ling) statement, that letter was made on the proposal made by the administration and that is the KSU... it was also based on the counsel of the legal advisers in the ministry,” PAC chairman Datuk Seri Azmi Khalid told reporters in Parliament.

Azmi defended Ling by saying he (Ling) was not the transport minister when PKFZ was being developed but was only in the ministry during the initial stages of the project.

“This happened many years ago, so there are some decisions which he doesn’t remember,” Azmi added.

It was reported that the former MCA president issued the first letter of support while Datuk Seri Chan Kong Choy issued the other three of the four letters, resulting in the RM12.5 billion burden to the people.

The four letters issued to turnkey developer Kuala Dimensi Sdn Bhd (KDSB) allowed it to raise RM4 billion in bonds that appeared to be guaranteed by the government.

Pakatan Rakyat (PR) leaders have argued that the transport minister does not have the power to issue financial guarantees committing the government as these can only be issued by the finance minister and only after Cabinet approval.

He did not specify who will be invited to testify at the hearing but commented that the committee will be calling all the ministers involved, along with former secretaries general of the ministry, former PKFZ directors and all those involved in the decision making.

“We want clarification on the decision made, especially from officers from the ministry” he said.

The PAC is conducting an investigation into how PKFZ’s initial cost of nearly RM2 billion ballooned to RM12.5 billion.

The scandal first surfaced in 2007 and disclosures so far show that the fiasco straddles the tenures as transport ministers of Datuk Seri Ong Tee Keat, Datuk Seri Chan Kong Choy and Tun Dr Ling Liong Sik.

Azmi explained that PAC wants clarification on the issue of land acquisition, the issuance of bonds by a company and not the government and the decision not to build PKFZ in stages.

“Who made the decision to develop in one go and not phase by phase? In the context of PKFZ, they built all at once. With lot of money spent, the end product is nothing.

“Now only 14 per cent of the project can be rented, the rest cannot. They are still looking for clients to enter the PKFZ. This affects the project’s liability,” he said.

Azmi also confirmed that Datuk Seri Ong Tee Keat will appear tomorrow while Datuk Seri Chan Kong Choy is scheduled to testify next week. He also said that the report will ready by the next parliamentary seating in October.