Posted on by Kit

PKFZ questions – why Transport Ministry should not cut losses instead of continuing to throw good money after bad to create a RM12.5 billion PKFZ “white elephant”?

In less than two days, MCA President and Transport Minister, Datuk Seri Ong Tee Keat has forgotten the directive of the Prime Minister, Datuk Seri Najib Razak to “provide answers on every question raised by any party” on the PricewaterhouseCooper (PwC) audit report on the Port Klang Free Zone (PKFZ) and has started to be abusive and refused to answer the many queries raised by the Malaysian public in the past three days.

Ong even refused to answer the six questions I have posed on the RM12.5 billion PKFZ scandal in the past two days, but I will pose another three questions today, as this is what the Prime Minister had promised – that he had directed Ong to respond to “every question raised by any party” on the PKFZ.

Ong seems to be “on the run” from these questions, like his predecessor as Transport Minister, Datuk Seri Chan Kong Choy in November 2007. Why is this?

At the media conference at Port Klang Authority (PKA) on Friday, after a DAP team had spent five hours leafing through the three-and-a-half-inch high documentary annexure to the PwC audit report on PKFZ, containing 20 appendices, I had asked the government to consider the option to cut losses in PKFZ instead of continuing to incur further losses in view of the PWC warning that the cost of the ill-advised project could skyrocket by another RM5 billion to reach the astronomical total of RM12.453 billion.

This is the first of my three questions on the PKFZ today, why the Transport Ministry should not cut losses instead of continuing to throw good money after bad with another RM5 billion losses to create a RM12.5 billion PKFZ “white elephant”?

Ong had tried to pour scorn on the proposal that the government cut losses and close down PKFZ as “a premature statement by politicians who think they can make well-informed financial decisions based on a few hours of looking through the PKFZ report”, saying that he will let “the financial consultants and management experts work out a more viable solution based on further in-depth studies before a more structured approach and solution is implemented”.

Ong had said quite a mouthful, but it is no answer at all. It is just meaningless gobbledegook, another example of Ong refining to a fine art his specialty of making a very complex statement because he is incapable of giving a simple answer!

I did not say last Friday that the Transport Ministry should cut losses and liquidate the PKFZ, even allowing the Port Klang Authority (PKA) to go bankrupt if this is one inescapable consequence – but that such an option should be seriously considered by the Transport Minister, as such an option stared me in the face when reading the shocking disclosures in the PwC audit report and the three-and-half-inch high annexures in the PKA library.

The Malaysian Trades Union Congress (MTUC) has called on the government to ensure the completion of the PKFZ project despite its present shortcomings.

Its vice-president, A. Balasubramaniam, said it would be a great waste to abandon the project mid-way as billions of ringgit of taxpayers’ money had been poured into it.

“With better management and adjustments the project can become a future money spinner for the Port Klang Authority,” he said.

Balasubramaniam, who is also secretary of the Union of Employees in Port Ancillary Services Suppliers (Unepass), said the PKFZ would also open up opportunities for hundreds of jobs for local workers.

I respect Balasubramiam’s views. Let us have an informed and intelligent national debate whether the government should continue with the PKFZ “white elephant” although it has snowballed from a RM1.1 billion scandal in 2002 under Datuk Seri Dr. Ling Liong Sik as Transport Minister, more than quadrupled to RM4.6 billion under Datuk Seri Chan Kong Choy as Transport Minister and now skyrocketed to RM7.453 billion under Ong’s watch, and likely to require another RM5 billion commitment to reach the astronomical total cost of RM12.5 billion!

This is why I am posing this first of my three questions on the PKFZ today, for Ong to explain why the Transport Ministry should not cut losses instead of continuing to throw good money after bad with another RM5 billion losses to create a RM12.5 billion PKFZ “white elephant”?

Ong cannot pass the buck by saying that the financial consultants and management experts will “work out a more viable solution based on further in-depth studies before a more structured approach and solution is implemented” when there should first be a policy decision whether the government should cut losses on PKFZ or continue to burden the present and future generations with a RM12.5 billion PKFZ “white elephant”.

This option must now be seriously on the agenda of policy makers because it is now revealed by the PwC audit report that PKFZ, based on its own assumptions, will be in cumulative cash flow deficit for the next 42 years, until 2041!

PKFZ’s assumptions are obviously too optimistic. Just to give two reasons:

  1. Occupancy rates. Current occupancy rate is only 14%. PKFZ assumes that occupancy rates for its Light Industrial Units (LIU) will rise to 20% in 2009, 47% in 2011 and 100% by 2014.
  2. Rental rates. The current actual LIU rental rate is already 20% below forecast. (RM1.20 per square foot per month vs RM1.50 forecast)

The PKFZ project cost now is already RM7.453 billion. If, as it appears, PKA will not meet its own cash flow assumptions, there would be an additional RM5bn cost.

With this scenario, the question that is legitimately asked is: Rather than wasting this further RM5 billion, shouldn’t PKA just be declared insolvent and the PKFZ “white elephant” shut down?

DAP MP for PJ Utara, Tony Pua, in his blog yesterday, “PKFZ: Should it be kept alive?” asked a most pertinent question:

“Should we throw good money after bad? Will there ever be a businessman (or even government) in the world, who will invest in a commercial project which is projecting cumulative cashflow deficit (note: we are not even talking about profits here!) after 33 years (2042)!!”

Can Malaysians expect a decent, sensible and well-considered response from Ong to my first question today (or No. 7th question) on the PKFZ?

Now to my second question on PKFZ today. The PcW audit report is very polite to say that “PKA may not have received value for money due to its heavy reliance on KDSB as turnkey developer”.

Lets put aside the period before Ong became Transport Minister, but can he answer what he has done since becoming Transport Minister in the past 15 months to ensure that PKA truly receive value for money from the PKFZ turnkey contractor, Kuala Dimensi Sdn Bhd, giving facts and figures.?

My third question is very simple. Although the DAP team had spent five hours at the PKA Library to leaf through the three-and-a-half-inch high PwC audit report annexure with 20 appendices, we have not been able to study them as thoroughly and satisfactorily as we wanted.

As Ong has directed the PKA Chairman, Datuk Lee Hwa Beng, to submit a copy of the PwC audit report, complete with the 20 appendices, to the MACC and the PAC, is he prepared to direct the PKA Chairman to give to the DAP Parliamentary team a complete set of the PwC report together with the 20 appendices for thorough study?

This might give us more ammunition to grill Ong and the PKA, but if Ong believes in the principles of accountability, transparency, integrity and good governance, he should be prepared to say “yes”.

In directing Ong “to answer every question raised by any party” on the PKFZ, the Prime Minister is clearly prepared to subject the PKFZ scandal to the widest and tiniest scrutiny.

For this reason, Ong will be invited to a public forum on the RM12.5 billion PKFZ Rip-Off and I hope he will appear at this forum to answer all questions whether by panellists or concerned members of the public on the PKFZ. Tony Pua is organising the forum.

42 Replies to “PKFZ questions – why Transport Ministry should not cut losses instead of continuing to throw good money after bad to create a RM12.5 billion PKFZ “white elephant”?”

  1. The government should sell PKFZ for one ringgit. That would prevent the country from losing money for the next 32 years.

    MV Augusta bought during TDM reign sold for one Euro.
    PKFZ started during TDM’s reign fit to be sold for one ringgit.
    He should now be given the number one; one euro ex-PM, or one-ringgit ex-PM.

  3. Why the Transport Ministry should not cut losses instead of continuing to throw good money after bad with another RM5 billion losses to create a RM12.5 billion PKFZ “white elephant”? – Kit

    Where did the money go?

  4. Lets put aside the period before Ong became Transport Minister, but can he answer what he has done since becoming Transport Minister in the past 15 months to ensure that PKA truly receive value for money from the PKFZ turnkey contractor, Kuala Dimensi Sdn Bhd, giving facts and figures? – Kit

    If Ong Ta Kut can answer this question I cut off my cookoo.

  5. As Ong has directed the PKA Chairman, Datuk Lee Hwa Beng, to submit a copy of the PwC audit report, complete with the 20 appendices, to the MACC and the PAC, is he prepared to direct the PKA Chairman to give to the DAP Parliamentary team a complete set of the PwC report together with the 20 appendices for thorough study? – Kit

    Let us get this straight once and for all, MCA is not here to help the Chinese, they con the Chinese to help themselves get rich, and you want them to prove it? Wait long long! But who cares because soon we are going to nail their balls one by one after the next general election.

  6. Well, the MCA aren’t the only ones who pretended to represent their race, and ended up raping the very people they were supposed to represent. Look at MIC, at UMNO. They pretended to support their respective races but they enriched themselves in the process – Morgan Stanley’s economist estimated the “leakages” to be US$100 billion !

    I’m asking Kit and colleagues to take whatever legal action they can to prevent the government loan of RM 4.3 billion to be drawn down further. We are all taxpayers, we have a say on how our money is to be used. Let PKA default on its obligations to KDSB – it was based on a fraudulent contract anyway. We want to use this money to really benefit the rakyat – especially if sugar, flour and cooking oil subsidies will be removed next year.

  8. Mr. Nades and Mr. Terence both form the Sun has written many articles and comments on PKFZ. These two are no ordinary journalist they are investigative journalist, their reports are as informative as PWC reports. They offer various views and questions for the authorities to answer but so far none . From here all can see hoe arrogant this BN and MCA was just incapable and surrendered to UMNO pressure?

  9. What’s wrong with our prime minister and all his top economic develoment planing experts doing in the first place ?.How on earth,those top experts could create a dumb mistake costing the rakyat losing RM12.5 billion in the PKFZ project ?.Are these fools still around earning their high salary ?.Will the responsible experts come out now and admit their mistakes and resign immediately.Why is it that our top politicians and top civil servants never learn from mistakes ?These guys never realise that they cannot take two wrongs to make one right I think we should fire all these bad guys now before they bankrupt us.

  10. The first billion was fraudulently obtained through a jacking up of the land price, and now several billions have to be spent to cover up the first fraud, and then several more billions have to be spent to cover up subsequent construction frauds.

    Most of the money were originally earmarked for the 2008 elections but ended up in certain people’s pockets. These people are so powerful that they can engineer a bailout of RM 4.6 billion of our money. I want to know who these people are. Do you hear me, Ong Ta Kut ? I want you to deliver on your promise to leave no stone unturned.

  11. I quote LKS’s reference to tee kiat’s response on cutting losses:

    “Ong cannot pass the buck by saying that the financial consultants and management experts will “work out a more viable solution based on further in-depth studies before a more structured approach and solution is implemented”.”

    Such reply suggest to me that it is only now that they have finally decided to engage independant experts to assist in the operation of the PKFZ.

    Typical no brainer reply. When problem first appeared (which must be a lot earlier then when the problem was first publicised and made known to us) this step should have been kicked into operation as an urgent first line of defence against the financial set-back. Such prompt action and such urgency is a much needed act and a responsible step for anyone who deals with public money.

    It is irresponsible of them in the first place to mishandle, mismanage and abuse the project and run up losses in the order of billions. As if that is not bad enough the mca idiots decided to worsen things and to deepen the problems by not taking that important and logical step to engage the assistance and services of financial and management experts at the first available opportunity.

    But then again engaging independant experts to work the project would necessarily mean that those mca idiots would not have a completely free hand to run the show they way they want to run it. RM12.5 billion and I wonder who has the majority slice of that cake? I suspect not mca but someone outside mca. And now mca has to eat dead cat carcass.

  12. I still remember OTK’s big mouth declaring loudly that “the report will be OUT NEXT WEEK”! But that was more than a month ago, which next week is he referring to? As long as he can still eat and shit, there is always going to be a NEXT WEEK!!!!!!

  13. Dear frankyapp,

    You know wot? Those experts may be removed from their respective positions. That much could happen and if it does happen it would be publicised. But wot we will not know is wot would happen to those removed. My bet is they would be transferred to other departments or posts or better still to more lucrative positions in some glcs.

  17. “Ong even refused to answer the six questions I have posed on the RM12.5 billion PKFZ scandal in the past two days, but I will pose another three questions today, as this is what the Prime Minister had promised – that he had directed Ong to respond to “every question raised by any party” on the PKFZ.”

    Refused to answer? I think the word is not “refused”. No answer, how to answer?

  18. Sorry. Off-topic.

    Pudu Station congestion. The city hall came up with one stupid measure. They decided that the congestion was caused by people who parked their vehicles by the road side. That is quite true. But the real problem is caused by the city hall’s delayed effort (by some 10plus years) in dispersing outstation coaches to around the city instead of letting them gather at Pudu Station.

    For their folly they now decided to inflict max inconvenience to the people by putting a waist high rail along the two pavements on either side of the road. Now cars and taxis cannot drop passengers off. Business operators on the other side of the road are similarly affected.

    The rails must be removed. For their folly the city hall must station their enforcement officers at site to guide and direct traffic to ease traffic flow. Taxis and other vehicles must be allowed to drop off passengers. But the enforcement officers must ensure that after dropping off passengers they do not linger on and hold up the traffic.

  19. Only in this silly land of ours
    Gomen put 1 billion into a project
    Then the DEFICIT balloned from 1 to 2 to 5 to 12 billion
    Unlike other more accountable nations
    Gomen put 1 billion into a project
    Then the PROFIT balloned from 1 to 2 to 5 to 12 billion
    Ma Lai Si Ya boleh mah

  21. Headlines that caught My Eye …..“Mansor the new Penang Deputy Chief Minister” – dated 31/5

    Well….It seems like the father is running the state government…not the son….Why can’t he wait till the legitimate CM make the official announcement? Will the State Government create new position for this man(Chief Minister Mentor)?

    BTW, Mansor’s appointment as DCM surprises everyone……..What’s so great about him…. What’s his greatest achievement? Does he have any proven track record?? DAP claims to be meritocratic….. placing a great emphasis on identifying and grooming bright individuals for positions of leadership…..No one gets appointed at the top straight away except Mansor’s new boss….

    Just be careful with DAP’s tactics…..The position is not free…..They have the perfect opportunity to demand something in return (Assuming PR took over the FG)……

  22. Our tax money used to enrich BN cronies. Why should we diligently pay our taxes?

    The bleeding will only stop when BN is kicked out to be replaced by PR. May it happen sooner rather than later.

  23. It is now a public perception that the once respected man of his word Ong Tee Keat who spoke so loud to “TELL ALL” on PKFZ has been reduced to a mere classic UMNO’s DOG. His “TELL ALL” PKFZ has now ended up a much waterdown & restricted “REVIEW SOME” audit report. It is not that OTK “refused” to answer the 6 questions, he is similarly “restricted” to answer any question without a “green light” from you know where.

    Any ordinary folk will agree that such dubious project that has caused losses of billions must be thoroughly investigated so that any wrong doers are quickly punished and at the same time IMMEDIATE measures are taken to stop further losses.

    What OTK is saying that he will let the financial consultants and management experts work out a more viable solution based on further in-depth studies before a more structured approach and solution is implemented is another shocker. Please don’t tell us they didn’t already have a team of most qualified financial consultants & management experts looking after the project right from DAY ONE?????????????? Or have they been fielding UMNO ‘YES’man from all the BN component parties to run the project and taking big fat gaji buta???????????????

    Can we imagine Rm1.1 billion project has escallated to Rm12.5 billions???????

    Its so convinient for OTK to pass the buck over to MACC. But why now after 15 months of ding dongs? Is it so that the guilty parties have enough time to erase their money trails????????????????

  24. One after another, from bad to worse, the goverment should be ashame of themself.. First Perak, now PKFZ.. the goverment must behave or they will be remove by the people..

  25. More scandals mean more people will support Pakatan Raykat, and more people will come out to vote in a new government.

    Maybe there will no more money left for PR to run the government.

    The how to upkeep all the royal families?

  26. The beautiful thing about this project is that not all the money has gone out of the door, and some of the crooks had projected to make millions over the next decade. If they don’t thow taxpayers’ money after the bad investment, how can the crooks get their hands on this money ?

  27. //Mansor’s appointment as DCM surprises everyone……..What’s so great about him…. What’s his greatest achievement? Does he have any proven track record?//

    Well, for one, he did not have someone blown up by c4. And he did not participate in stealing RM 12.5 billion of the taxpayers’ money. And he was not paid RM 200 a day by umno to write negative comments in opposition blogs.

  28. There is a thing in biz strategy called maximising profits, the opposite of which is minimising your maximum losses, i.e. the maximin-minimax startegy.

    Ong probably has no clue to such strategies, given that all these UMNO/BN Ministers have a view that they cannot admit defeat publicly, falsely generating the notion that saving loss of face is more important than losing several billions $ of Taxpayers’ money.

    Najib, ONg, MCA & UMNO MUST realise that cutting your losses when faced with a potential loss of $12 billion (a new record in Bolehland’s financial frauds history) is the best stratgey over sinking good money after bad!

    Unless of course Najib, Muhy, Ong, UMNO, BN Minsiters and BBC members are willing to give their personal guarantees of success by depositing $12.5 billion cash with Bank Negara to cover future losses.

    It’s easy to talk when it’s not your own money that’s going down the drain. There is no turn-around gebius in M’sia who can gaurantee the reversal of PKFZ’s fortunes, given the mess and fraud that’s already been created.

    It’s time to bury this project and recover whatever money we can by publicl tender/auction of land and buildings.

    But the Govt must make sure heads roll at the same time and bot cover up for the fraudtrepreneurs and politicians behind this fiasco!!

  30. “Flash Tee Keat mulls legal action for PKFZ overcharging ”

    It is not too late and it is better late than non.

    Mr. Nades has also commented that legal action should be the way to recover from the crooks .

    Pls read the Sun for more detail on Mr. Nades comments.

  31. Will MACC take action over the PKFZ scandal given that there are no opposition politicians involved? Don’t hold your breath as this scandal has been festering for a long time with no action taken by MACC despite the opposition lodging many reports.

    MACC will of course wait for things to quiet down and when provoked by LKS in future, will give a terse reply that they have investigated and found no wrongdoing.

    Failure to bring the culprits to book will just confirm to all Malaysians that the BN govt is corrupt to the core and has honed stealing public money for itself and is cronies to a fine art while shamelessly protecting the guilty.

    This will be another big nail for BN’s coffin. It’s just too big to be swept under the carpet. PR’s battle cry for the 13th G.E. should be “REMEMBER PERAK!!, REMEMBER PKFZ!!, REMEMBER…(coming soon)!!”

  32. Just wonder if Sabahan & Sarawakian can feel the impact.

    It is necessary to share the news with everyone in Malaysia. Tell them to count the no of zero.

    10’000,000,000 or the equivalent harvest to match the amount.

    Telling the truth can be jailed but Billion of RM corruption has nothing to fear.

    Hopeless.

  33. Liars!Liars!Liars!
    Thieves!Thieves!Thieves!
    Ordinary people have to die to protect their blood, sweat & tears from snatch thieves.
    In MCA & last 3 presidents we have thieves who snatched our hard earned money for next 5 years.

  34. hahahahahaha! Only MCA? Only last 3 years? geez, BN and all component parties lah – for the last 40 years. and today, the BN gomen gonna withdraw subsidies for 3 essential commodities saving RM1.3bil. But how much did they blow on PKFZ? RM4.5bil and counting, expected to top RM8bil?

    oh, don’t forget the RM500mil to seal the deal.

    and the RM100mil to send a tourist to space.

    or the almost-purchased junk of a soyuz shuttle that would have cost…THE PEOPLE’S HARD-EARNED MONEY!

    get rid of the blood suckers and there will be no need to withdraw the subsidies….and prevent across-the-board increase in cost of living and prices of almost everything!

  35. In Bolehland, the proposal that has the highest cost gets to do the deal. In Bolehland, the project that has the highest cost overruns is designated as the best project, with the smartest sponsors.

    If you try to save money on any project, you must be really dumb. All the BN politicians will cease their support.

    RM 12.5 billion is a nice number. All those working with PKA and KDSB should be commended for helping the economy. After all, those who spent this money building warehouses and having an occupancy rate of 14 pct must be visionaries.

  37. I would like to propose to make PKFZ a place to keep all the Alongs, snatch thiefs, mat rempit, cetak rompak, bapa ayam, itiks etc etc. instead of as a white elephant, as there’s not enough prison cells in the country to keep all of them and as a result of that, PDRM has to release them ASAP so as not to have stampede in the prisons!!!

    BN is going to issue vouchers for the poor to buy food instead of subsidising the foods!!! I wonder whether the cost of printing each voucher will be more than the face value of each voucher!!! Moreover, the voucher will be issued through post office which will charge more commission than the voucher value itself!!! More money more money the BN way!!!

    Another mini budget coming!!! Money not enough for all the money losing projects!!! BN’s motto on running business; ” We are not in the money making business, we just ask for breakeven”, is it true that it is breaking even??? may be another fifty years down the road!!!

  38. BN is making sure that no opposition parties would like to form the next federal govt. even if the opposition won, because of all the failed projects and problems due to BN!!! So that they can continue to rule and suck the blood of the Rakyat!!! Some people said dont use the word Rakyat too often as it sounds like communist!!!

  39. OTK should exchange portfolio with another MCA minister!!! He went into the wrong ministry!!! He should let Chua SL to be the minister for transport and let Chua dig his own grave!!! By then, he would ask Chua to answer every question raised by any party just like Najis did!!! LOL!!!

  41. Ong Tee Keat never does his home work well, the only trait he has is “Argumentative”.

    He is always belligerent in his verbal argument in the media, never accept opposing view, his and only his view is correct and shall prevail, no matter what. That is what he is observed to be good all the times.

    His answers or his statements always contain next to nothing constructive or informative to the Malaysian public.

    So as far as this PKFZ issue, he can be left alone. It is vain to direct any queries at him.

    He is just a persona non grata, catering to his own.

  42. Pingback: PKFZ questions – why Transport Ministry should not cut losses instead of continuing to throw good money after bad to create a RM12.5 billion PKFZ “white elephant”? | PKFZ

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