On Treasury orders, PKA pays RM360mil to Kuala Dimensi

By Wong Choon Mei, Suara Keadilan

Reneging on its promise, the government-run Port Klang Authority has paid RM360 million or more than half the RM660 million owed to Kuala Dimensi Sdn Bhd, the controversial turnkey contractor pinpointed for irregularity in an audit report into the Port Klang Free Zone debacle.

The shock U-turn has re-ignited a public uproar, especially coming hot on the heels of Prime Minister Najib Razak’s refusal to help villagers in Penang’s Kampung Buah Pala repurchase land that was sold by his Umno-BN government at way-below-market-price to a high-end condominium developer without consulting them.

“If the federal government can sanction this huge payment which reeks of corruption, it should also be responsible enough to fund the cost of re-acquisition in Kampung Buah Pala which is a pittance by comparison,” said a political analyst.

In a statement issued on Monday, PKA chairman Lee Hwa Beng said he was merely carrying out instructions given by the Treasury, which comes under Najib, who is also Finance Minister.

“PKA has also received instructions from the Treasury that the board should be mindful of the implications that might affect the confidence of investors, local or foreign, in the Malaysian private debt securities market,” said Lee.

“It also spelt out the consequences of non-payment and the possibility of the trustees acting upon the directions of the bondholders and Commercial Paper/MediumTerm Note holders to enforce the security charge.

“The PKA board has, after taking into consideration the appeal from the trustees and the stand of the Finance Ministry, decided to release the repayment amounts due.”

The real puppet-masters behind PKFZ

Amid relentless pressure from the Pakatan Rakyat, which has been calling on Transport Minister Ong Tee Keat to account for all dubious aspects in the project, the PKA had on June 30 finally agreed to withhold payment until a special task force completed its review and made due recommendations as to how to resolve the problems.

The full amount RM660 million was to have been paid to four companies created by Kuala Dimensi – Special Port Vehicle Bhd, Transhipment Megahub Bhd, Valid Ventures Bhd and Free Zone Capital Bhd – in four installments throughout June and July.

After Monday’s payment, the balance RM300 million will have to be paid by July 31.

Launched in 2002, the PKFZ white elephant was modelled after the Jebel Ali free trade zone in the United Arab Emirates.

From an initial budget of RM1.9 billion, massive cost overruns have pushed the outlay to RM7.5 billion currently and could hit RM12.5 billion if debt taken for the project is not restructured.

PKFZ is also the Malaysian government’s biggest investment ever in the port industry. The scandal has implicated a string of Barisan Nasional politicians, including former MCA president Ling Liong Sik and former transport minister Chan Kong Choy.

Additionally, the chairman of the BN Backbenchers Club Tiong King Sing is the majority shareholder of turnkey contractor Kuala Dimensi.

However, political analysts believe the real puppet-masters behind the PKFZ debacle were from the Umno top echelon on the grounds that the scale of corruption was too massive to have been perpetrated without their knowledge and green light.

An audit report prepared by PricewaterhouseCoopers has exposed land purchases at a ’special prices’ that were way above market value, adding that Kuala Dimensi may have also overcharged interest between RM51 million to RM309 million.