Monday, November 09, 2009

PKFZ: Investigate Tun Ling!

Tun Ling Liong Sik must also be investigated for his role in the approval and implementation of the Port Klang Free Zone project which commenced under his watch


The Public Accounts Committee (PAC) report on the RM12.5 billion PKFZ scandal released last Wednesday has received ample media attention, with its specific references to the former Minister of Transport, Tan Sri Chan Kong Choy, the former Port Klang Authority general manager, Datin Paduka O C Phang, and to a lesser extent, the secretary-generals of the Ministry of Transport, Dato’ Zaharah binti Shaari (Jun 1999 to Jul 2005) and Dato’ Muhd. Safaruddin Bin Muhd. Sidek (Jul 2005 – Oct 2006).

However, based on the details and testimonies provided in the full report, the Government and its agencies such as the newly set up super task force headed by the Chief Secretary Tan Sri Mohd Sidek Hassan, the police force as well as the Malaysian Anti-Corruption Commission must also initiate detailed investigations against the other former Minister who initiated the PKFZ project, Tun Ling Liong Sik.

During his testimony to the PAC, when Tun Ling was posed certain key questions with regards to the project, he had answered “I can't remember” or its equivalent at least 11 times which raises doubts with regards to the veracity of his answers. The situation even reached a point of incredulity when Deputy Public Accounts Committee Chairperson, Tan Seng Giaw asked “Tun, did you know of Kuala Dimensi Sdn. Bhd. atau KDSB, before you left the ministry..., did you know about it?” and Tun Ling responded with “I may have heard about it.”

Hence a thorough investigation must be conducted on the role that Tun Ling Liong Sik played in the entire project, especially with regards to the following points:

  1. Tun Ling had denied that the Ministry of Transport had any role in the finalisation of the land purchase agreement with KDSB, placing the responsibility on the Treasury which was headed by Tun Dr Mahathir Mohamad then in 2001-02.

    However, the testimonies of the government officers, and the letters by the Jabatan Penilaian dan Perkhidmatan Harta have confirmed that it was at the Ministry of Transport which has constantly requested the value of the land be revised upwards, from RM17 psf (with reclamation and basic infrastructure) in 1998 to RM18 psf in May 2000 to RM21 psf in Sep 2000 and finally RM25 psf (with interest for deferred payments).

  2. Despite Tun Ling's claims to the contrary, the Port Klang Authority and Ministry of Transport had signed the land purchase agreement at an even higher effective price of RM25 psf without interest and RM41.76 psf after interest for deferred payments. No such authority was given by the Treasury for the revision in purchase price.

  3. The Ministry of Transport under Tun Ling has either defied a Treasury order dated 12 Jun 2001 and advice from the Attorney-General for the land to be acquired compulsorily or have strongly argued against doing so in securing the Cabinet approval for the project. This has resulted in a loss to the government amounting to RM646 million.

  4. The Ministry of Transport under Tun Ling has also awarded the initial development contract to KDSB with no tender, open or closed, despite a specific Treasury order dated 12 Jun 2001 requiring an open tender for development works. To the question posed to Tun Ling by PAC on this issue, he said “I am not prepared to comment because I really cannot remember the circumstances.”

  5. In the same Treasury order, the Ministry of Transport under Tun Ling was also required to secure funding via bonds raised by the Treasury for the purchase of the land which will be at a lower interest rate of 4%, instead of the 7.5% incurred via deferred payments to KDSB. When this question was posed to Tun Ling at the PAC meeting, he responded with “I can't remember”.

  6. Tun Ling also issued a letter of support on the project to Malaysian International Merchant Bankers Bhd (MIMB) and Pacific Trustees Berhad dated 28 May 2003. The Attorney-General has confirmed that the contents of the letter signed by Tun Ling was a statement of fact.

    However, when probed further by the PAC as to why the Government had decided to retrospectively approve the guarantee for the 4 letters of support, including the 3 issued by Tan Sri Chan Kong Choy, Tan Sri Abdul Ghani Patail informed the PAC that the word of the Government is worth its weight in gold (my paraphrase).
Tony Pua: Tan Sri, you mentioned the three letters, they got AAA because the so-called letter of support that we give has got obvious unsur-unsur jaminan. Akan tetapi bagi surat yang pertama yang tidak ada unsur-unsur jaminan, kenapa pula mereka juga bagi 3A? Mereka juga bagi 3A rating bagi surat yang pertama. Adakah kerajaan for that portion at least, tidak mempunyai obligasi to complete the guarantee.
    Tan Sri Abdul Gani Patail: [Menanyakan soalan kepada pegawai yang mengiringi] I must admit, I am not sure on the first letter whether they were given AAA rating or not.
      Tony Pua: It is for about RM1.3 or RM1.4 billion.
        Tan Sri Abdul Gani Patail: Yes. [Berbincang dengan pegawai-pegawai pengiring] May I explain that? Yes, my colleague has confirmed. Yes, they were given AAA rating for that, but at also the same time as I explained just now, when the government issues a letter of support, how loosely it is, the rating agency will give you a AAA.
        Because whatever it is, when the government says, I support this project or so on. There is no way the government is going to back out. We will still perform and the rating agency and everybody knows that. Macam mana pun the government credibility cannot be torn down in that sense.
        Hence even if the letter did not specifically contain elements of guarantee, the Government is obliged to honour its words. Therefore, Tun Ling has also committed the Government to bearing the cost of the project amounting to RM1.31 billion as the amount that was raised by KDSB based on his letter of support.
        There are many other instances of wrongdoings which are highlighted in the PAC report which occurred during the period in which Tun Ling Liong Sik was the Minister of Transport. It defies believe that for a project which is claimed to be of such great importance to the Ministry and country, Tun Ling had little knowledge or can't remember at all what happened during the period.

        The minutes of the Port Klang Authority Board meetings have shown that the Board acted or was rendered impotent in the decision making process with regards to issues relating to PKFZ. Approvals and decisions were made between the General Manager of PKA, Datin Paduka OC Phang and the Ministers of Transport directly, and hence the latter must be held accountable to the entire fiasco.

        We call upon Tun Ling to be fully investigated by the relevant authorities, and no stones must be left unturned including the Cabinet meeting minutes which was inaccessible to the Public Accounts Committee to determine the full extent of Tun Ling Liong Sik's involved since the project was first mooted in the mid-1990s. At the very least, Tun Ling must be investigated for wilful negligence in the carrying out of his responsibilities as the Minister of Transport.
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