By Neville Spykerman
KUALA LUMPUR, June 22 — Datuk Seri Ong Tee Keat’s long-awaited ministerial statement on the Port Klang Free Zone (PKFZ) today is unlikely to satisfy his critics.
The transport minister made no mention of the culprits who caused PKFZ’s development cost to balloon from RM2 billion to RM12.5 billion, according to an audit report by PricewaterhouseCoopers (PwC).
Ong only briefly touched on the sale on the land, the development cost of the project and the road ahead for PKFZ.
The minister, who has been under fire from the DAP's Lim Kit Siang over the scandal, was dismissive of the opposition man's "intellectual depth".
In Parliament today, Ong tried to make a case for the government's efforts in attempting to make PKFZ profitable while skirting round the issue of culpability for the scandal.
He said the Cabinet, on Oct 2, 2002, made the decision to allow the Port Klang Authority (PKA) to purchase 1,000 acres of land for RM1.08 billion.
The price included basic infrastructure and land reclamation, while the cost of the land alone was just RM422 million.
The Cabinet decided to approve the purchase after the state government indicated the land could not be acquired under section 3(1)(a) of the Land Acquisition Act 1960 because PKFZ was not a public project.
PKFZ’s main problem is the increase in its development cost.
In 2002 the cost was estimated to be RM1.957 billion but in 2008 the cost had risen to RM3.522 billion.
Taking into account the interest on the basis of staggered payments to the turnkey developer Kuala Dimensi Sdn Bhd (KDSB), variation orders to the land, professional fees, the development cost will further rise to RM4.947 billion by 2017.
In 2007, the PKA was given a soft loan of RM4.389 billion from the Finance Ministry for 20 years to pay KDSB.
Based on current practice, if the interest on the soft loan is paid back at a rate of four per cent, in 20 years the interest alone would amount to RM2.506 billion by 2036.
Ong said that assuming PKA’s cash flow remained unchanged and the payback period was extended to 2051, the interest which would have to be paid would exceed RM5 billion and the whole project would indeed cost RM12.453 billion by 2051.
However, the minister said this would only happened if there was no intervention and effort to promote PKFZ.
“The scenario is just hypothetical,” said Ong.
In reality, he said, initiatives have been made to promote PKFZ and more tenants have set up shop there.
Ong also said three committees had been set up to guide PKFZ to profitability.
At a press conference later at the Parliament lobby, Ong hit out at Lim for distorting and manipulating the facts surrounding the scandal.
“He lacks intellectual depth,” said Ong.
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