Silence, sense-surround silence, thundering silence from Datuk Seri Ong Tee Keat, MCA President and Transport Minister, to my daily three questions on the PricewaterhouseCoopers audit report on the RM12.5 billion Port Klang Free Zone (PKFZ) Rip-Off despite the open and public directive by the Prime Minister, Datuk Seri Najib Razak to Ong “to provide answers on every question raised by any party” on PwC’s PKFZ report.
Am I surprised? I am not.
However, as there is standing instruction by the Prime Minister to Ong to answer every question on the PKFZ “mother of all scandals” by anyone, I will continue with my daily three question to the Transport Minister, this being the fourth consecutive “3 questions a day”.
My first question today to Ong is why he was being downright irresponsible when he said in Penang yesterday that “outlays for the controversial Port Klang Free Zone (PKFZ) project could end up being less than RM4.6 billion” (“PKFZ could cost less than RM4.6b” – New Straits Times June 2, 2009) by engaging legal experts and consultants to recover the “overcharging” reported by PcW.
Engaging legal experts and consultants to “probe and also consider the recovery of overcharging elements” is going to incur further costs, and its not going to be cheap. Furthermore, there is no guarantee that any money would be recovered. What is certain is that more money would go down the drain!
How can Ong be so irresponsible as to be talking about the PKFZ “white elephant” costing less than RM4.6 billion when the PwC report stated that PKFZ project had escalated to RM7.453 billion and could cost another RM5 billion to reach the astronomical total of RM12.453 billion.?
Probably, Ong does not fully understand the contents and grasp the implications of PwC’s PKFZ audit report.
Let me just refer him to the Executive Summary of PwC’s PKFZ report, which stated:
“Project outlay has escalated from RM1.957 billion to RM3.522 billion, excluding interest cost. Including interest cost, the Project outlay increases to RM7.453 billion
2.5 PKA entered into several agreements with KDSB to purchase the Land and develop the Project on a turnkey basis. The original estimated cost for the land purchase and development works in 2001 was RM1.957 billion. As shown in the chart on the next page, Project outlay has escalated to RM3.522 billion as at 31 December 2008. Interest cost of the deferred payments to KDSB amounted to RM1.425 billion resulting in a total Project outlay of RM4.947 billion.
2.6 PKA was unable to fund its obligations to KDSB from its own resources when the first scheduled payment was due in 2007. PKA secured a 20-year soft loan of RM4.632 billion from MOF, of which RM4.382 billion is available for draw down. This loan would impose an additional interest cost of RM2.506 billion resulting in a total Project outlay of RM7.453 billion.
PKA must restructure the MOF soft loan to avoid a potential default in 2012
2.7 Cashflow projections prepared by PKA management show that PKA would be in a cumulative cash deficit position between 2012 and 2041, after paying two instalments to MOF. Should PKA fail to meet the MOF soft loan instalments as scheduled and if these instalments are deferred to match its projected cashflows, it would incur additional interest cost of approximately RM5 billion. This would further increase the outlay of the Project to RM12.453 billion.”
In fact, there are grounds to believe that not all the costs incurred for the PKFZ project had been brought to the notice and knowledge of PwC.
For instance, it is reported today that Port Klang Authority (PKA) was yesterday sued for a RM147 million bill for “corporate advisory services” by Mega-Wan Corporate Services Sdn Bhd.
As reported by the Sun, this RM147 million bill is made up of three claims for professional fees for corporate advisory and associated services, viz
- RM97.27 million on the management of the PKFZ from January 2006 to August 2007 which covers consultation on the appointment of Jebel Ali Free Zone (JAFZ) to manage PKFZ as well as the eventual termination of the management agreement;
- RM1.9 million to Port Klang Authority (PKA) on issues and queries related to PKFZ project between August 2007 and May 2008; and
- RM48.6 million for professional fees to advise and conduct financial re-engineering rendered to PKA to facilitate the appeal for a RM4.6 billion loan from the Ministry of Finance to fund the PKFZ project.
Ong should explain whether PwC was informed of this RM147 million claim in connection with the PKFZ project when conducting its audit, and if not why, as Mega-Wan Corporate Services Sdn. Bhd had submitted its claim for repayment to the then PKA general manager Lim Thean Shiang as far back as Sept. 12, 2008 when PwC was in the process of conducting its audit.
If PwC had been notified of this RM147 million claim in connection with the PKFZ project, why was it omitted in the PwC audit report as this raises the question of its professionalism?
My second question to Ong is what is the cost of the PwC audit investigation. It is bruited that the fees paid to PwC is RM3 million. Can Ong give the exact sum?
Third question: Why is the PwC audit report on PKFZ going to be available online at www.pka-report.com for only a period of two weeks from 28th May to 10th June 2009, which is a most unusual practice. Could Ong ensure that the PwC audit report on PKFZ should remain on the PKA website so long as the PKFZ scandal is not resolved?
In fact, what Ong should do is to ensure that all the 20 appendices of the PwC report should be uploaded on the same site so that all Malaysians can access them to find out why the interests and rights of present and future generations should be pawned away by a RM12.5 billion PKFZ Rip-Off.
If Ong or PKA have technical problems of putting the appendices on the Internet, the DAP IT team is prepared to render its help and services.
It was reported in the Sun today that a consulting firm by the name of Mega Wan Sdn Bhd is filing a lawsuit in Shah Alam to compel PKA to pay RM147 million in consulting fees over a two year period. The consulting firm is apparently owned by a number of UMNOputras.
The article in the Sun also implied that PKA did not know about the contracts involved as the previous GM had asked for the original contracts upon receipt of the claims by Mega Wan.
Isn’t this wonderful in Bolehland ? Milk the cow until the cow is on life support. Even when the cow is on life support, continue to milk it before it dies. Ong Ta Kut should understand that we are not paying to revive the cow. We want to know who is responsible for putting the cow on life support in the first place.
RM 12 billion, RM 7.5 billion, these are just numbers. The bigger the number the better the chances of everyone getting to milk the cow. UMNO, MCA, SDPP – better carry on milking before 2013.
If I were Gerakan or MIC or PPP I’d be asking the question: When is my turn to milk the cow ? The cow’s on life support ? Oh well, as long as there’s some milk left, give me a chance to milk it…..
Let put it again, This project is evil conceived and conceptualized to milk tax payers money for all the cronies.
MCA has never have the intention to tell all and they are playing the hiding game.
The Sun has many sources and its disclosures are frightening. I demand as a tax payer, OTK to act immediately on the Sun report other wise sue them for defamation
Hahahaha….the roof of the spanking new 50,000 capacity stadium in Kuala Trengganu collapsed this morning. This was part of the UMNO construction boom that included the crystal mosque, the new palace, etc.
Would potential tenants in PKFZ be put off by this piece of news ? Would the roofs of the properties in PKFZ collapse, especially since the defects liability periods are over ?
The PwC report mentioned that PKA did not receive value for money on the construction of the buildings and infrastructure. Well, some parties did receive value for money for sure.
Outwardly…you know what Njib ordered Ong Ta Kut to do….and it is good Lim Kit Siang is cashing in with questions.
Privately…reveal all…Ta Kut will become Bak Kut…in another forest.
All of you can wait till Kingdom come for the Truth
I wonder does any UMNO or BN politicians know what truth is.
If truth is out….Mahathir and Ling Liong Sik…first to be hurled up for questioning.
Even now…Ta Kut try to make the problems look simple and solvable with small money injected in….contradicting professional reports. What qualifications does Ta Kut have to handle such a highly complicated huge service centre …dealing with ships…containers…complicate machines……all sorts of professionals?
What degrees does he have?
So watch the show…where ministers keep wasting their time.
You put all reports infront of him..he will stare at them…seeking help from clerks…smarter than him.
Can he read by himself…understand all… and ask questions?
No no no….it’s a bloody show…which we have sen so many before.
the contractor of the Gong Badak stadium (likely to be an umno-related firm) must be investigated. what kind of materials were used? how much money they have pocketed from the construction?
don’t tell us that it is god’s act or the wind was too strong!
The elderly monster roars again… Same storyline. … the storyline becomes stereotype.. you can predict what will happen next… it is unnecessary to exaggerate in making the story interesting……The young generation of today would rather play PSP rather than listening to a fairy tale…..
Stop arguring who’s who’s milking the cow. We know the cow is now under life support,hence go after those who are responsible for the present state of the sick cow.Check files and records to determine the real culprits.No MACC please. We need RCI.RM12.5 billion should justified for it (RCI).We have enough of scandals already for more than half a century.Hopefully this is the last.
No -ec-, it’s not god’s act, because He would had waited for the contractor to be in the stadium before He drops the roof on top of that sucker.
Revealing the truth has the same effect of blowing up Altantuya using C4 explosive. Perhaps some individuals will decide to do a hara-kiri out of shame, while another old and prominent toon might simply drop dead, once the pressure builds up.
Our country needs proper check & balances, make sure Pakatan Rakyat obtains more than 2/3 majority in the 13th GE, otherwise change will never come. From the outcome of “police commission” & “Lingam commision”, one can only expect where PKFZ issue is going to end under BN government – UNDER THE CARPET!
Major effort must be sort to get young unregistered voters to register. For starter, let each of us help 10 of these unregistered voters to register and teach them to do the same and multiply the effort down the line. We have only 3 years to do it before the next GE!
With our tax payers’ money “leaking” through all kinds of “projects” (PKFZ is just the tip of an iceberg), we can understand why a Singapore $ is fetching almost 2.5 Rm today (where back in the early 70’s, you could use them interchangebly, they valued the same!) and we understand why Singapore Income per capita is more than 6 times higher than ours. How can we Malaysians of all races can continue to let an irresponsible BN government continue to bleed our belove nation??????????????????????
BN birthday present on the
Another project yang Gemilang, Terbilang & Cermerlang. Project by no other than the CORRUPTED BN.
The idiot cintanegara speaks from his backside again….ask him what he says now about the stadium collapse in Kuala Trengganu – one year after opening. Ask him what happened to MRRII cracks. Ask him what happened to Parliament roof leaks. Ask him what happened to Martrade building leaks.
PKFZ has 14 pct occupancy. No one except for some stupid UMNOputra will occupy the remaining 86 pct. What’s there to bail out ?
YB with regard to you question of 2 weeks time frame. i believe you should have know it. You know Malaysian have the shortest memory in the world so after two weeks semua OK.
If you don’t believe what happen in KT stadium? What happen to Perak where building also have collapsed no long ago. What action have been taken? Ai Ya, you questions is good academically.
If they are sincere to answer your questions they should have answer will queries raised in the Sun paper long time ago?
REMINDER!! latest by 30.06.2009, please pay up your balances of taxes so that Mega Wan bills can be paid in time. PWC fees shouls have paid up front before they start work
RM 4.6 billion soft loans. And the interest already cost so many billions pushing potential total cost to RM 12.5 billion.
Soft loans are at very low rates, very much below market rates. Somebody, the taxpayer, has to bear the “hidden” difference in rates. Why is the taxpayer subsidising PKA when it is supposed to be self-sufficient, self-supporting?
What if the interest rate is at full market rate as it should be? Might the true cost then amount to RM 20 billion or perhaps even more?
Already the interest-to-cost ratio is already 300 – 500%.
And so many “experts” and “consultants” are constantly being employed on this gravy train. Now they want to employ more of these “experts” and “consultants” to “advise” and “check” on the previous ones.
Doesn’t the gravy train ever stop?
Unbelievable, how many things are done in this country.
In Bodohland, paying tax is like feeding the worms.
And now another building / structure has collapsed. This time in Kuala Terengganu.
The stadium roof there collapsed this morning, after the Jaya Supermarket building collapse last week. And it is a new structure too.
Something is wrong with our professional standards perhaps. JKR, engineers, architects, contractors, what have you.
In Bolehland, every ringgit of construction cost is divided as to 10 pct for the middleman who helped win the contract, 10 pct for the quantity surveyor or consulting engineer who signed off on the progress payments, 30 pct to the UMNO guy who helped win the contract, 10 pct to the winning contractor and 40 pct to the ultimate subcontractor.
So we pay 1 ringgit and really obtained 40 sen worth of work. This in PwC language is “not getting value for money”. It’s been going on for 30 years.
more like this than the building people and the corruption involved.
Kuala Terenganu mean land of the down with the
nation.
So the stadium named after the Agong who has
failed to do his duty for the nation for the common good of 27 millions, is receiving yet another alert.
According to Rukun Negara, when the Agong fails,
God takes over as the next step. DAP is hosting a ceramah titled ” Political crisis… what is next?”
So IGGG is a must on the day Najib travels to China.
Gong Badak and Agong must be noticed as relevant.
The failed nation when it collapses many will be victims.
Right now where has all the RM150 billions in Bank Negara M’sia gone over a year from 2008 to 2009?
Joshua
RM97.27 million as professional fees for corporate advisory and associated services on the management of the PKFZ from January 2006 to August 2007, says Sun2Surf at http://www.thesundaily.com/article.cfm?id=34161
What kind of consultancy work is that that is worth RM5.4 million a month? It’s better than robbing a bank for one and a half year’s work. And seems like it’s tong sampah work, looking at the end result.
From now on until the next general elections, King Ta Kut must work doubly hard on the PKFZ “mother of all scandals” to survive at the next elections. He has to ensure that the “people that can be named” and the “people that cannot be named” in the report should be given punitive sentences, if found to be guilty of the wrong doings. The released report is only a part of the whole episode. King Ta Kut had yet to honour his “tell all” public pledge on 8 April 2009.
Otherwise, King Ta Kut will be forced out of office by the people power. Just imagine the tremendous and huge amount of money (RM12.5 billion) involved. How much developments can be carried out with RM12.5 billion for the Rakyat to enjoy?
Why was King Ta Kut so irresponsible to provide answers on the questions raised by brother Kit Siang on behalf of the people. King Ta Kut was directed by Najib to answer. If King Ta Kut cannot do it, just say so.
Kit:
Can you please start a fundraising exercise to collect sufficient money to put up a billboard at PKFZ with the words: “Satu Lagi Projek Barisan Nasional.”
Too many millions and billions lah. These cronies also lost count where the money gone and OTK kept saying on the news oppositions trying to make hoohaa out of the whole issue.
My reply to this disgraceful MCA chairmeh is go home and do more calculation how many billions were lost and how many billions more going to go to your pocket before opening you big b***dy mouth.
You think the rakyat are bodoh?! PFKZ going to be the bulleye to bury corrupted BN once and for all in the 13th General Election!!!
Waste in the billions? Do BN care? Check out the new palace – link below
http://sjsandteam.wordpress.com/2009/06/02/a-royal-salute-or-a-royal-screw/
Please read what Nadez from the Sun wrote on why JAFZA pulled out from PKFZ – link below
http://mt.m2day.org/2008/content/view/22682/84/
Only [deleted] will cheat and lie.
Only [deleted] will rob and steal.
Satu lagi Projek [deleted] Negara should be named after PFKZ in honor of those who have quit the board of directors after filling their stomach.
[admin – we are civilised in our discourse, derogatory words not allowed]
Citizenwatch:
Your link suggests that the price tag of the new palace has increased from RM400 million announced by Semi Value 6 years ago to RM 1.1 billion now. My sources put the latest price tag at RM 1.2 billion inclusive of all imported furnishings.
As with all projects in Bolehland, the bigger the price tag the better, as there will be more to share around.
Another billion ringgit for your consumption (just don’t throw up):
TNB is building a new hydroelectric project above the current Kenyir dam called Ulu Terengganu. It has a tag price of 1.4 billion. Due to the poor hydrology, there is water to run the turbines only 15 pct of the time. Each unit of electricity will cost about 3X the cost of a unit produced by an IPP. Once TNB made the decision to go ahead, the Terengganu government issued licences to several crony companies to log an area of 12,000 hectares.
Now you guys can puke.
‘My first question today to Ong (Tee Keat) is why he was being downright irresponsible when he said in Penang yesterday that “outlays for the controversial Port Klang Free Zone (PKFZ) project could end up being less than RM4.6 billion” (“PKFZ could cost less than RM4.6b” – New Straits Times June 2, 2009) by engaging legal experts and consultants to recover the “overcharging” reported by PcW.’ (Lim Kit Siang)
Ong Tee Keat may be an excellent Chinese essay writer but we may judge from his above comment that Ong Tee Keat indeed knows nothing much about businesses and accounting. Perhaps Ong Tee Keat should have consulted the departmental head of MCA HQ Complaint Service Team, Mr Michael Chong, on the consequences of defaulted repayment to Ah Longs which happened to Michael Chong’s complainant clients in order to get a better understanding on the effect of compound interest calculations plus the punitive interest calculations after a delinquency in overdue loan repayment.
Ong Tee Keat’s comment that the total cash outlay projection can be brought down to a much lower figure ‘by engaging legal experts and consultants to recover the “overcharging” reported by PcW’ was really an irresponsible remark uttered from the mouth of a novice Politician who has no reasonable level of knowledge about the basic accounting principles – one of which is being the principle of taking the lower cost of assets at market value or at cost price (LCM) in the assumption of a liquidation situation.
In view of the current bleak economic situation of global recession, we are only able to forecast a much lower sale value for PKA’s assets now in case of forced liquidated disposal as compared to the audit date of PwC audit on PKA accounts, that was being carried out during a time when American 2008 financial crisis had never been disclosed to the whole world. I am in great doubt that Ong Tee Keat’s legal experts and consultants will be able to find any ‘overcharging’ item in the PwC audit report.
If Ong Tee Keat is trying to suggest that he can get the BN Backbencher Leader Tiong Keng Seng to lower the interest rate chargeable on PKA or to waive PKA from paying the overdue interest, then he is suggesting ‘changing rules in the midst of the game play.’ If such practice of changing rules in the midst of playing game is allowed to prevail in the Government-Linked Corporation like PKA, then it is most likely going to send a thunderstorm negative message to the business world. Such a negative message may have caused a crisis of loss of confidence in the integrity of Malaysia’s Federal Government and of loss confidence in the enforceability of all contractual agreements signed between the private main contractors and the Government-Linked Corporations.
The country risk rating of Malaysia’s business environment will most likely be plunged and plumetted to the one-time lowest level if Ong Tee Keat’s suggestion for changing rules in the middle of the game play can be acceded by any judicial courts of Malaysia!
cintanegara says that the PKFZ scandal is a fairy tale conjured up by LKS.
cintanegara, before only your thing downunder was frigid, now your otak also become frigid.
I wonder why such a dodo still exists. All it can do is to bury its head inside the sand and to expose its rear end.
Somebody must send this dodo to the Singapore zoo.
On 2/6/2009 at 12:30.12 cintanegara said:
The elderly monster roars again… Same storyline. … the storyline becomes stereotype.. you can predict what will happen next… it is unnecessary to exaggerate in making the story interesting……The young generation of today would rather play PSP rather than listening to a fairy tale…..
This PKFZ scandal is an issue about corruption, public funds derived from taxpayers’ money being channeled in a dubious manner to shore up a grossly mis-managed high profile project.
Surely, the supporters of UMNO’s BN know this very well, that UMNO’s own disciplinary board had found Malacca CM & Rembau MP guilty of money politics, but MACC thought it was a fairy tale and therefore, no corruption &.no need to investigate.
But when there was just a rumour or gossip about money politics in PAS, MACC didn’t think it was a fairy tale, and quickly pulled in a PAS member for questioning.
Remember that intrepid reporters had earlier published articles of about the PKFZ scandal in the Sun quite long ago, and if it was really some fairy tale consisting of a repetitive, stereotype, predictable and exaggerated same old storyline, those reporters would have already been sued for libel.
But they weren’t.