Published August 17, 2009

MALAYSIA INSIGHT
Get to the bottom of PKFZ debacle

Finding out what's wrong with the Port Klang Free Zone and who the culprits are remain the top priority

By PAULINE NG
KL CORRESPONDENT
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TIONG King Sing's claim of having provided RM10 million (S$4 million) cash to the Malaysian Chinese Association (MCA) for its activities through its president and transport minister Ong Tee Keat had tongues in the nation wagging last week.

Controversy: Mr Tiong (above) has alleged that he gave RM10 million cash to the MCA through Mr Ong but Mr Ong has denied the claim

Mr Tiong who controls Kuala Dimensi Sdn Bhd - the turnkey developer in the scandal-ridden Port Klang Free Zone (PKFZ) - also alleged Mr Ong had taken some four to five rides in Kuala Dimensi's private jets without making any payment.

Much is at stake in the findings on the ailing PKFZ, which looks set to be Malaysia's most expensive debacle. When first mooted by its owner-operator Port Klang Authority (PKA) in the late 1990s, the proposed regional transshipment hub was expected to cost some RM1.9 billion but has since cost taxpayers at least thrice as much.

An independent audit has now recommended a RM4.6 billion government loan be restructured to meet the PKA's cashflows even though it would further inflate costs to some RM12.5 billion.

Struggling Malaysians have been obviously agitated by the findings of independent audits sanctioned by Mr Ong's ministry.

Appointed as transport minister last year, he was left saddled with the white elephant, whose earlier custodians as ministers are Ling Liong Sik and Chan Kong Choy.

Even Parliament's Public Accounts Committee has rapped the PKA for its lack of experience in the development of such a zone.

The project had been incompetently handled, it observed, adding that government representatives on the board took the assertions of Kuala Dimensi as a fact without further scrutiny despite the size of the project.

Kuala Dimensi had been scrutinised by various audits and special investigations. The first by PricewaterhouseCoopers highlighted the poor levels of oversight and governance and numerous conflicts of interest in the zone's development.

Last week, a special taskforce consisting of experts in different fields concluded that unsubstantiated claims and over-billing by Kuala Dimensi could run to as much as RM1 billion. PKA, now headed by a new board and management, has filed a police report against Kuala Dimensi and its project consultant BTA Architect.

Mr Tiong, however, maintains that there is no truth in the findings. The developer has also maintained that the PKA is not doing enough to market the zone which is only 15 per cent occupied, and that the company is being made a scapegoat.

While the RM10 million loan or donation by Mr Tiong will be harder to prove, Mr Ong has denied the claim about the RM10 million loan and has threatened to file a defamation suit.

But he has acknowledged the jet rides and offered to pay for them. The local media have observed, however, that the government's General Orders disallow civil servants from taking flights that cost more than commercial ones.

Online comments suggest Mr Ong, who has built a reputation as a straight talker and reformer, ought to resign for his indiscretion over the jet rides. There have been similar suggestions for Mr Tiong - a Barisan National (BN) member of parliament from the Sarawak Progressive Democratic Party and chairman of the Backbenchers' Club - to step down pending investigations.

BN has reason to fear a public backlash as Kuala Dimensi also has a number of top execs linked to Umno and the deputy prime minister. Party deputy president Muhyiddin Yassin has already warned both men to be more circumspect in their comments.

Mr Ong fortunately has his party's support in the matter. Many in the MCA believe the allegations against him are an attempt to distract public focus from the PKFZ.

Even though free jet rides reveal bad judgment, full scrutiny of what is wrong with the zone and targeting the culprits remain the priority.