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.


True Fiction said...

Obviously, there were some very incompetent people in charge of and involved in the project. And if they were not incompetent, they were sly.

However, above all the noise and chest thumping, I don't get any vibes that there is a will to make a decision on the project, or bring the people accountable for the project to book.

Sometimes, I don't know if I should laugh (cause there is money to be made if I decide to be crooked) or cry (cause I, the taxpayer, got robbed and there will be no justice)

Anonymous said...

yb, i am so sorry.

i voted for this otk in pandan. my tot was that he WAS (at least it appeared to most of us) the least tainted and most 'dependable' of mca leaders.

i now (or since a few months back, actually) stand corrected.

this otk, if he contests in pandan again, i'll kick his sorry ass out!!!


tanglk said...

1. Everybody talk but nobody seem to differentiate the different between REVIEW and AUDIT. To be fair to PwC, they are given the task to review, not to audit/investigate. You were given the materials to build a terrace house but your customers expect the end result is Condominium.

2. I don't know why set that kind of scope. PwC may suggest (as this is lowest risk for them) but why PKA agree? Experience accountants (note: experience, we have more than 20k chartered accountants but less than quarter can understand this) can tell u what you can expect on the first day.

3. Really upset with OTK's reply that PwC (or any other big accounting firms) has no competency to do the investigation with legal implication. He should check the fact before put his reply.

4. All politicians talk but no accountants, lawyers (on Rashid Asari's conflict of interest as well as the weight of Letter of Support) , and even architect (on QS4's role) dare to talk.

marcus63 said...

tony, absolute power corrupts absolutely. when otk was outside looking in, he was a gung-ho cowboy reformist respected by the people for his daring to speak up. once he ascended the throne, he turned into another feudal warlord protecting both his interests as well as those of his kind.
under bn/umno, this is a feudal state where their continued survival depends on plundering the masses to keep the warlords rich and contented so they do not rock the system. they cannot change, as change will upset this profit-sharing formula, and they will get a revolt from within. revolt from the rakyat they can accept because they can easily quell it by force.
umno/bn learned this from a very close ally in asean itself.

Khun Pana aka johanssm said...

A case of greed , corrupted hands , half past 6 group of cabinet ministers and incompetent management team .
Just like the highway's agreements it is all loopsided.
When there is no transparency , shady dealings become a norm.
Even with the report no one is claiming accountability.
We lost more than 4 billions and it will goes up to 8 billions
Hoping on macc to do the job is pure nonsense by now.When macc could have launch their investigations when the cost went up years ago

telur dua said...

OTK just need to do some simple arithmetic to see how much will be the annual bank interest on the RM12.5b.

And from there add in the operating cost and other overheads. What is the revenue so far? Projected revenue? Still viable after all these considerations?

I'm afraid this is another sick baby for the taxpayers to carry.

NEO said...

I think PKA is company incorporated with "Limited by Guarantee"

So, just wound-up the PKA and let the government to compensated the guarantee amounts. This amount is much lower (maybe less than 2b) as compare with the 12.5b or 15b.

Then, surrender the PKFZ to selangor state government. Let Selangor state government to managed and re-build the P.Kelang FZ.

Most European and US exporter and importer only know of Port Kelang but not Port Klang!

Anonymous said...

It's not mismanagment it's outright ABUSE.
What are they gonna do? I don't think they give a dame. There's gonna be a lot this and that but nothing is gonna come out of this, trust me. They are all from the same corner. Their argument is for their benifit and not for the rakyat. It's not only today this HUGE problem is brought up, and who is gonna pay THE RAKYAT.
I say cut the losses and punish the crooks.

telur dua said...

BMF cost 2b in 1982/3 so PKFZ should cost 12,5b in 2009.

Financial @#$-ups must also factor in inflation. No?

Anonymous said...

OKT, OKT! However good or smart you may be ..(giving him the benefit of the doubt here).., when you are stuck among a pile of "sheet" (spelling is intentional) you will also smell like one!... and end up looking like one soon!

KoSong Cafe said...

PKA is a clear case of MCA fronting collective BN abuse. It is payback time for politicians who opted for short-term gains in the form of positions and opportunities to gain.

The situation is such that it continues to serve the purpose of those politicians who 'come and go', with nobody having to face the music if the music did not stop. It is much easier to talk boldly and hope that after a couple of months, most people would have forgotten about it, until the next crisis ie. when the company is insolvent.

We have examples of Royal Commissions and yet nothing comes of them when it comes to implementation.

I would like to liken PKFZ as being given a Ferrari with a condition to use every day. So, there seems to be no option not to use it and we maintain the status symbol when we can least afford it.

Anonymous said...

What do you expect, when PKA board is made up of political has beens and civil servants. I am not sure if they even read a financial statement.

Much worse, PKA management are headed by political hacks. They cannot do much harm when running a small coastal port. Its incompetence leads the this PKFZ disaster - clueless management and negligence.

In hindsight, PKFZ should have started with a management overhaul of PKA. I think PKFZ can still recover. But it must start with the restructuring of PKA board and management.

Anonymous said...

Of course OTK is upset. Upset that he never got a piece of the pie from the rape of over RM 4,000,000,000. Now he wants to balloon it to over RM 12,000,000,000 coz he thinks he will be MCA President & Transport Minister for the next 10 years. It's not his RM 12,000,000,000 so what does he care. He just wants some of the gravy he missed out when the previous MCA peers have licked the pot dry.