Sunday, May 31, 2009

PKFZ: Hold Your Horses?

I've been awoken from my blogging slumber over the past week after reading Minister of Transport, Datuk Seri Ong Tee Keat's latest statements on PKFZ. Apologies to loyal readers for the lack of updates but an MP's work during the day, and a daddy's work rocking the newborn to sleep at night doesn't give me plenty of incentive to write too much, even though there's much to be written. ;-)

I have commented in the earlier post to say that Ong Tee Keat and BN must be completely blind not to even consider the obvious that the giga-financial-scandal-Port-Klang-Free-Zone should be shut down to cut losses, which are likely to balloon to RM12.5 billion, and require additional RM8.6 billion funding by the Government.

He said:
"I am disappointed to learn that some opposition members have proposed that the Government cut losses and close down PKFZ. This is 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."
I say, no wonder MCA and BN are suffering because they can't even see and act on the stark obvious reality even after being presented to them on a silver platter by the PriceWaterhouse Coopers audit report. No wonder also, there's mismanagement galore in all BN-run "commercial" entities like PKFZ, Pempena, Proton, MAS, UEM etc etc. in this country.

It's funny when he said further that:
"I am also surprised at the opposition's obvious lack of understanding of the financials involved.

It is clear from the report that the RM12.5 billion figure only arises when the debt is staggered over a longer period as a result from the projected inability to service the loan installment between 2012 to 2041. The projected cumulative cost will only determine in the year 2051. Many of us may not be around by then.

The claim that the cost of the project has ‘mushroomed to to an astronomical RM12.5 b scandal under my watch' is akin to heaping debts due in 2051 on me now for malicious political reasons."
Firstly, I wonder who has the lack of financial understanding on the financial implications of the project. We had financial experts and chartered accountants with us to decipher the more complicated elements of the report and to confirm our views of the matter. Hence our position is certainly no rhetoric.

Secondly, he said that the RM12.5b is only a hypothetical figure assuming cashflow deficit til 2042. Datuk Seri, the Port Klang Authority has given these figures to the PwC, who translated them into the obvious. RM12.5 is needed to keep the project alive based on estimates given by PKA! And that's if PKA and PKFZ meets its targets, which with all due respect, is highly doubtful i.e., it will cost even more!

And yes, indeed many of us may be around by 2051, which means that we are loading up debt for this highly suspect project for our children and grandchildren to pay!

Thirdly, this project has mushroomed to RM12.5b under Ong Tee Keat's watch is because over the past 15 months, despite promises of fast, bold actions, what with his motto "courage to change, creating new values", absolutely nothing in the PKA cashflow projections on the financial viability of PKFZ demonstrate that the project will ever be a success! Instead, it will continue to burden the "rakyat" for decades to come!

Ong Tee Keat may say that we have had only a couple of hours to look through the concise and too the point report by PwC (don't know why you'd need too much longer), but the Transport Minister has had 15 months, and yet he has come up with absolutely no solution to resolve the matter!

And now he says "We need now to seriously act on the findings of the report to make sure that the interest of the people are fully protected and that this Government walks the talk" but he can tell us that shutting down PKFZ to cut losses and salvage assets is not an option to be considered.

To be frank, Ong Tee Keat is definitely in my list of more respectable Ministers in the cabinet among the many 'half-past-six' ones. However, we definitely need to see less talk, and more actions from both the Minister, and his government for him to redeem his credibility from this episode.
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