Finally, PKFZ audit will be released tomorrow, really

KUALA LUMPUR, May 27,2009 – By Leslie Lau | malaysiainsider Consulting Editor

Bowing to public pressure, the government will make public tomorrow the audit report on the scandal-plagued Port Klang Free Zone (PKFZ) but this could be the just the strat of more problems for the government.

Several ministers are now saying that the government will need to address certain disclosures and do not rule out calling in the Malaysian Anti-Corruption Commission (MACC).

The cabinet decided today to release in full the report tomorrow, but there are concerns that certain Barisan Nasional (BN) politicians could be implicated.

“I have finally obtained the green light for the report to be released in its entirety.

“I am very glad that the prime minister and my cabinet colleagues share my aspirations that our government should be transparent and directly deal with the issues of the day. Sweeping problems under the carpet is not an option,” Transport Minister Datuk Seri Ong Tee Keat said in a posting on his blog today.

Ong has come under intense pressure to release the report which had cost his predecessor his job in the Barisan Nasional (BN) Cabinet.

The DAP’s Lim Kit Siang has been a leading critic of Ong who had originally pledged to release the report last year but had been unable to fulfill his promise due to technical and legal hurdles.

Acknowledging the criticisms, Ong said today: “The PKFZ issue has been played up by the opposition for a few years and they have used it as their political capital.

“We now have to disappoint them by proving to the public that the new administration under our Prime Minister has nothing to hide and is prepared to reveal the truth as well as to take appropriate action should there be any wrongdoing.”

According to a sources story in The Sun newspaper recently, the PwC report contains evidence of various questionable decisions and actions, like the selling price of the controversial PKFZ site to the PKA, haphazard project costing and agreements drawn up to the detriment of the PKA.

The 405ha PKFZ transhipment hub, which has warehouses, office blocks and a four-star hotel, has been dogged by controversy ever since it was revealed that its original development cost had ballooned from less than RM2.5 billion to up to RM4.6 billion.

There were also questions about possible kickbacks after it was disclosed that several individuals had acquired the piece of land where the PKFZ now sits at RM3 per sq ft in 1999. The PKA later acquired the land at RM25psf.

The PKFZ ran into further problems when the management company Jebel Ali Free Zone International terminated its contract in 2007.

Former Transport Minister Tan Sri Chan Kong Choy was dropped as the Barisan Nasional candidate for the general election last year and subsequently lost his job largely due to the way the PKFZ debacle was handled.

The Malaysian Anti-Corruption Commission (MACC) has also initiated a preliminary investigation into allegations that the cost of the project had possibly ballooned to RM7.5 billion from an initial cost of RM2.5 billion.