RM4.6 billion Port Klang Free Zone scandal — why is the government on-the-run?

This is the question I posed in Parliament today — “Why is the government-on-the-run on the RM4.6 billion Port Klang Free Zone (PKFZ) scandal?”

During the 2008 Budget committee stage debate on the Finance Ministry, I started my speech protesting against government ministers kicking the issue of the RM4.6 billion PKFZ scandal from one Ministry to another, evading accountability by refusing to give a direct answer to many pertinent questions which I had posed — with the ball being kicked among the Prime Minister’s Department, the Ministry of Finance and the Ministry of Transport with no one wanting to give a proper answer.

I simplified the questions on the PKFZ scandal which cry out for answer, viz:

1. Was it true that when the Port Klang Authority and the Transport Ministry insisted on buying the 1,000 acres of Pulau Indah land for PKFZ at RM25 psf on a “willing buyer, willing seller” basis, in the face of strong objection by the Attorney-General’s Chambers and the Treasury which had recommended that the land be acquired at RM10 psf, the Cabinet had given its approval subject to two conditions: (i) categorical assurance by the Transport Minister that the PKFZ proposal was feasible and self-financing and would not require any public funding; and (ii) that every RM100 million variation in the development costs of PKFZ would require prior Cabinet approval.

2. In the event, the first condition was breached when the PKFZ project ballooned from RM1.1 billion to RM4.6 billion requiring government intervention and bailout while the second condition was breached with the original PKFZ development costs of RM400 million ballooning to RM2.8 billion without any prior Cabinet approval ever sought for every RM100 million increase in development costs.

3. The Transport Minister had unlawfully issued four Letters of Support to Kuala Dimensi Sdn. Bhd (KDSB), the PKFZ turnkey contractor — to raise RM4 billion bonds, which were regarded as government guarantees by the market. The Transport Minister had no such powers to issue financial guarantees committing the government, as it could only be issued by the Finance Minister and only after Cabinet approval. The first Letter of Support was issued by the former Transport Minister, Tun Dr. Ling Liong Sik on May 28, 2003, which was Liong Sik’s last day as Transport Minister while the other three were issued by Kong Choy.

4. Whether it wasn’t true that in recognition that the four unlawful “Letters of Support” of the Transport Minister had nonetheless given implicit government guarantee to the market that the Cabinet had in mid-year to give retrospective approval for the unlawful and unauthorized four Letters of Support by the Transport Ministers in the past four years creating RM4.6 billion liability for the government in the bailout of PKFZ.

5. Why no action had been taken against the Transport Minister, both Liong Sik and Kong Choy, as well as the government officials responsible for the unlawful issue of the four “Letters of Support”. Kong Choy had said that he did not know that he had no power as Transport Minister to issue such Letters of Support, Was this an acceptable explanation for getting the government embroiled in the RM4.6 billion PKFZ scandal?

When hard-pressed, the Parliamentary Secretary to the Finance Ministry, Datuk Seri Dr. Hilmi Yahya asked that he be allowed to answer by way of written reply. When asked when the written would be given, he declined to give any firm date on the ground that a proper study had to be done. When I persisted in asking whether an answer could be forthcoming in a week’s time, as this was not a new issue and had been raised for over two months, Hilmi said he would try.

I gave notice that I would be “chasing” him for the reply and would not relent in my pursuit for a satisfactory answer and accountability for the RM4.6 billion PKFZ bailout scandal.

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35 Replies to “RM4.6 billion Port Klang Free Zone scandal — why is the government on-the-run?”

  1. “When asked when the written would be given, he ((Parliamentary Secretary to MoF) declined to give any firm date on the ground that a proper study had to be done. When I persisted whether answer could be forthcoming in a week’s time, as this was not a new issue and had been raised for over two months, Hilmi said he would try.” KIT
    “I gave notice that I would be “chasing” him for the reply and would not relent in my pursuit ..” KIT

    Chase after him if you must! But do not expect to catch anybody who insists on running in circles.

  2. This is a message to the all Malaysians. There is no accountability in the BN (read as UMNO) coalition.

    What does this tell us? The opposition in parliament is not strong enough.

    What must we, the rakyat do in the coming GE? DO NOT vote to give the BN a 2/3 majority in parliament. They need the 2/3 majority to cruise through any policies they want to pass, and nobody can do a damn thing!

    Vote opposition, whether you like it or not, and give the opposition 1/3 or more parliamentary seats. Then the BN cannot sail through any policy they want to implement.

    We do not need the opposition to win the GE to form the next govt. We need them to win only 1/3 +1 to ensure check and ability to defeat any useless and racially-motivated motions proposed by BN in parliament.

    I am not a politician and maybe my message may not be understood. Probably someone more competent in such affairs could expand on the implications.

  3. Why don’t question about the second space tourist issue?

    Because I don’t want to see another space tourist send to space to play gasing, congkak, cook kolo mee or share experience on how to pee in space.

  4. it can’t be revealed is it becos the documents are under OSA or ISA or WSA(watever secrets act)?or maybe they are waiting for whoever wanna be the scapegoat.it is clearly they cant and wont be able to come up with a good explaination for all these scandals…they are probably caught tight lipped and run out of reasons.orang kata…kalau mau makan pun kena makan elok elok sikit.these idiots hv taken things for granted and really makan elok elok.lets just wait and see what kinda drama they are gonna put up with for us to see.

  5. Uncle YB Lim,
    Thank you for making the case so clear to us.

    As far as I can make it:-
    1) Some “people” have teamed up together by going along with the higher price,ie RM15 psf more. I wonder if all those involved are happy with their share of this nice big chunk of cake.
    2) One can’t help but suspect that the ‘recue team’ is a party to this ‘cake’.

    This case rightly commands the utmost urgent attention. By simply pushing the ball around & play ‘tai chi’ will only cause the citizens creating more speculation.

    Again, an independent royal commission must be called to task, no more and no less.

    I for one am not against anyone but I think I deserve to know the truth for I am a Malaysian!

  6. We all want to know the truth, but none will be forthcoming. We can’t expect the den of thieves to incriminate themselves, so they have to sweep everything under the carpet. Look at the Lingam independent panel – the Sleepy Head may not even publicise the three different reports from the panel.

  7. i am thinking it will finally land on AAB’s lap because he will be too lazy even to pass the buck to someone else… he will once again remain slow and mute to refute anything and then in the end everyone thinks that it is him…
    yes, chase them till their pants fall down. Keep the heat on them!! Election will be near and we must keep on waving their dirty linen for all to see…

  8. The next rally should be to get the govt to answer to the many scandals that robbed the taxpayers’ of their money. The many billions “wasted” could hv been used to cushion the hike in oil price and much could hv been allocated towards education.

    Time to demand answers from these scums and am sure with the rising costs of living we can even secure more than 40k people this time around to have a picnic in the park. When you are hardpressed on every side, it doesnt matter anymore if you are an Umno stooge or supporter. As long as you cant benefit from it, talk whatever is also crap!

  9. Don’t get angry with them buddies. They can be a liar or hypocrite, they can “rasuah”, they can keep digging our country’s wealth till dry, they can escape from answering Mr.Lim KS question but trust me, they won’t and they will never escape from the law of “KARMA”….

    Those people will get their repercussion soon or later in this life or in their next and next next next …….life…

  10. Mr.Lim, please can DAP prepare a “SCANDAL CHECK LIST” with all the scandals being listed down one by one as people are easy to forget… ask all opposition/NGO/DAP bloggers to upload that list into their blog, post it to MT, merdekaview, we too can help to deliver via email and etc….

    You can see people now has forgotten about the Mongolia case and someone BIG still hiding in behind without giving a good answer on the submarine commission scandal…. bla bla bla..

  11. I wonder why Semi Value and Kayveas as champions of Indian interests have remained mute so far. This is clearly a case of conspiracy to defraud the public without Indian participation. UMNO and MCA have had their cut, and where is the cut for the Indians ?

    Yes, we must keep pursuing this matter even though the thieves will try to sweep everything under the carpet. Embarrass them, humiliate them in blogs, chain emails. Embarrass them in Parliament. [deleted]

  12. This is the result of absolute power given to the BN government by the people.
    Not only do we see absolute corruption but also absolute arrogance, absolute impunity, absolute denial of wrong doings, absolute immorality and absolute abuse of power.
    The government is answerable to no one. It thinks it owns the country and acts as it wishes.
    It brushes aside contrary views and never admits to mistakes. And it lies and cheats the people.
    And yet gives homilies and sermons from the pulpit.

  13. You know something is wrong when they are shouting about a few million dollar investment from foreigners in a multi-billion project. Why be shameless if you don’t have to?

    I don’t get it why Badawi does not want to hang these old guards out to dry given the cost to him. After 4 years, he still cannot consolidate his power given his absolute executive and party president power? How pathetic is that?

    At the end of it, you got to call a spade a spade, he is just a very poor leader. He is suited to manage, not lead…

  14. Kit:

    The comment that some ministers foam at their mouths like rabid dogs isn’t an inaccurate statement. Did you have an understanding with the Information Minister that you will censor such comments ?

  15. we take individual responsibility for our comments, and they know where to find us if they think that we have broken the law. If they can call bloggers monkeys and pondans, then we can call them rabid dogs.

  16. “We take individual responsibility for our comments, and they know where to find us if they think that we have broken the law.” Godfather

    That’s precisely the point. They know everybody’s IP addresses. They are not interested in us but Kit! But Kit has broken no law.

    And like Bakri Musa I too challenge them to come pick me up.

  17. Pak “Space Power”, where is your rocket and space centre? Saja pandai beli tempat duduk dalam kapal angkasa orang lain
    http://news.bbc.co.uk/2/hi/asia-pacific/7091216.stm
    Off the southern tip of the Korean peninsula the country’s first launch pad is under construction. The brand-new Naro Space Centre, being built on an island 500km (300 miles) south of Seoul, is a major project….The first rocket launch is now expected to take place towards the end of next year.

  18. Biasalah….as expected, everything sweep under the carpet…dun talk about mega projects, the scandals at the municipal councils have also been conveniently forgotten….this is the most forgetful administration that i have encountered.

  19. YB Lim, it was in my e-mail before. If I can recap, the scheme was:

    1. The Pulau Indah folks sold the land to Persatuan N at RM3.00 psf. (again the local Malays and Orang Asli got a rotten deal).

    2. Persatuan N sold the land to one Company D for RM10. (Company D was a RM2 company)

    3. Company D sold the land to PKFTZ for RM25.00. (the type of business I like, but can’t get).

    YB Lim, that web was better understood when I saw the names of people in that Persatuan and Company D. To verify these you do not need more than a month.

  20. semua menteri pun makan wang lah. besar makan wang besar kecik makan wang keciklah. malaysia punya culture, biasalah. atas sampai bawah pun makan. ini malaysia kalau ada power semua boleh bikin. bunuh orang pun tak ada hal. kalau rakyat biasa, taktau berapa kali dia mati loh. beli hightech weapon, beli submarine mau buat apa. mau lawan dengan siapa, tapi bukan mau lawanlah. mau makan senyap senyap sajalah. bena istana! wah! hidup macam Raja. apa boleh buat, tak boleh bikin apa punya lah.
    ular dengan tikus hidup dalam satu sarang. PM mana boleh lebih cakap. Agung pun dia orang tak takut lah, Gua ingat kalau Agung masuk campur dan banyak cakap dia orang berani lucut Agung punya kuasa lah.

  21. Uncle YB Lim,
    You don’t have it under your post categories for PKFZ the gravity of which I think deserves a slot so that new readers can refer & go through & get informed quickly.

    Oknyua,
    Thanks for input. Who are the people in the persatuan N and company D?

  22. waterman,

    I’ll try to get that e-mail for you. Meanwhile, I believe YB Lim KS knows the details.

    Anyway YB, the letter from Port Klang (read Transport Ministry) was necessary because the RAM for the bond applicant was weak. By itself, they can’t even get a RAM. With that letter they got tripple A. Got it, YB? Kong Choy was in the dark then.

  23. Numerous major scandals over the decades had cost the country and taxpayers billions, let alone the gross abuse and excesses….the government continues to be re-elected.

    Something is terribly wrong!

  24. Undergrad2:

    Good of you to challenge the BN goons to pick you up when you are in the US…

    Seriously, if we call someone an idiot or a monkey or a rabid dog. what’s the criminal offence ? Kit has his idea of a Westminster-style decorum, which the thieves never follow anyway, so why should the Opposition be “nice” to them ?

    No, they can’t go after Kit, and they can’t come after us just because we call them names especially AFTER they have called us names.

  25. “…//…Kong Choy had said that he did not know that he had no power as Transport Minister to issue such Letters of Support, was this an acceptable explanation for getting the government embroiled in the RM4.6 billion PKFZ scandal?..//…” – YB Kit.

    No, it is not acceptable. A Minister cannot plead ignorance regarding what he is authorised or not authorised to do as an excuse – and yet claim he is not half past six.

    It is ironical that if a bank officer exceeds his authority in a loan approval by a few hundred thousand Ringgit he can be prosecuted under Banking and Financial Institutional Act for jeopardizing public funds but where a minister exceeded his authority committing public funds measured in terms of billions of Ringgit he is not only not held accountable but the government ratified his unauthorized acts, judging from what you said about “the cabinet had in mid-year to give retrospective approval for the unlawful and unauthorized four Letters of Support by the Transport Ministers in the past four years creating RM4.6 billion liability for the government in the bailout of PKFZ”.

    Paradoxically, the very basis for pressing action to be taken against the ex and present Transport Minister as well as the government officials responsible for the unlawful issue of the four “Letters of Support” becomes no more when the government ratified the unauthorized acts making them authorized (retrospectively).

  26. “Good of you to challenge the BN goons to pick you up when you are in the US…” Godfather

    The same reason why our Bakri Musa (from good ‘ol California) dropped his gauntlet!

    Since we find ourselves living in the ‘home of the brave’ and ‘land of the free’ we try to live up to its name. Bush would not have it any other way.

    As for readers who post here from local IP addresses, perhaps the only advice would be to practice sitting on ice a few hours a day in the hope that when it comes to the real thing, the ice would melt instead of your bald appendages freezing! It’s good to let things hang out! Hanging out is what we do over here.

  27. “…where a minister exceeded his authority committing public funds measured in terms of billions of Ringgit he is not only not held accountable but the government ratified his unauthorized acts..” Jeffrey

    It is like a gang rape. There were so many, the victim could no longer identify who the rapists are. They could not snitch on each other since snitching would incriminate the one who snitches – and in Malaysia no immunity from prosecution has ever been given.

  28. YB, thumb up for your good job.

    Reveal this greatest scandal, ” corrupted politic” in Malaysia.

    Do not let the questionable Transport Minister retire peacefully after making Billion.

    Publicise the issue to the extreme corner to bring all the culprit to justice.

    Let it be the history of change for Malaysian.

  29. YB., the whole process of cheating the public started with the so-called ‘privatization’,especially of the ports; admittedly, as government agencies, some of those ports were not as competitive as our neighbor’s, [ you know who]; but what were the causes behind these inefficiencies? The NINCOMPOOPS who made up of the boards which controlled the actual managemnet of the ports.These NINCOMPOOPS were [and still are ] made up of either politicians or retired government officers who had no inkling of any idea, whether on port or logistics. They would only interfere in displinary issues when one of their bump supporters [meaning members of BN parties] was called up to be censured.
    We were, to an extent capable of giving our friendly neighbour a run for their money; but it was never to be. As a matter of interest, you could always check out the gentleman who ‘captured’ by them and then empowered by them to turn the port around.
    In the name of privatization, big contracts as advocated by the then PM were always negotiated, all you need to do is to compare the costs onvolved. With the tolls keep on ‘growing’ every 3 years, believe me the other privatized units, like the ports would ask for their rates to be revised up-wards now and then.
    I was told that the Brunei Government has proposed to reclaim an existing island of some 4,500 acres to double its size; coupled with a 5km linear-wharf at 18m draft alongside.
    This project would be larger than both PTP, Westport and Northport combined, in term of land area. Let’s wait and see the total cost involved. We had annouced our halal hubs, let’s also see if our hubs can take off faster than Brunei’s, though it was rumoured that some Aussie suppliers had already shown intersts.
    Based on past experiences, I would bet, in spite of the cheaper malaysian ringgit, the cost per unit at our end would still be higher. It had been the basis of all such lucrative and huge projects.
    It so happens that in the case of FCZ at Pulau Indah, too many of them were involved and to maintain equal share, the figures were moved higher each time they wanted more. Even based on the 4% interest rate, however the zone is managed, it would never recover enough even to pay the low interest rate! That we can bet on. To all Malysians, the only route available is at the POLL.

  30. this scandal is a real slap on the government’s face. how is it conceivably possible that 4.6 billion ringgit of government funds(our tax payers money) be used to bail out the involved parties? it only creates a thousand more questions. mr. kit siang, please keep up your constant throbbing on this issue as such mega bailouts like this do not re-occur in the future.

    It is high time we stand up for what is righteous by being heard.

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