KUALA LUMPUR, Nov 24 — The Port Klang Authority (PKA) must publicly disclose its reasons for allegedly dropping a RM720 million civil suit against the developer of the controversial Port Klang Free Zone (PKFZ) project, as the statutory body continues to struggle with sustained losses over the years, a DAP lawmaker said today.
Serdang MP Ong Kian Ming said the PKA has accumulated some RM674 million in losses since 2010, leaving it precariously dependent on continued government assistance through a long-term government loan to just scrape through.
“This shocking decision must be explained publicly by Tan Sri Kong Cho Ha, the newly appointed chairman of PKA, because of the involvement of taxpayer’s funds,” Ong said in a statement.
The Edge Financial Daily today reported that the PKA board had unanimously agreed to withdraw its suit against turnkey contractor Kuala Dimensi Sdn Bhd (KDSB), just two months after the appointment of Kong, a former transport minister.
Citing sources, the business paper claimed that seven of the nine directors on the board had decided at a special meeting in Putrajaya last Friday to also initiate negotiations with KDSB to withdraw the latter party’s suit against the PKA.
The decision to drop the suit was allegedly based on the acquittal of former Transport Minister Tun Dr Ling Liong Sik from the charge of misleading the Cabinet on PKFZ’s land valuation, the sources added.
The news report claimed that those present at the Friday meeting were Kong, PKA general manager Datuk Captain David Padman, Datuk Abdullah Yusuff Basiron from the Transport Ministry, Datuk S. Murugesan, Datuk Song Kee Chai, Tan Chong Seng and Loo Kwee Thiam.
The two absentees were Finance Ministry representative Datuk Dr Mohd Isa Hussain and Datuk Badaruddin Mahyudin from the Public Private Partnership Unit.
Ong today said the Finance Ministry must also come clean as to why their representative was not present to vote on such a significant decision by the PKA board, since it is the ministry that decides on all current and future financial assistance doled out to the statutory body.
The opposition man added that the decision appears to follow a worrying trend where former ministers implicated in the scandal were either acquitted, like in Dr Ling’s case, or had their charges dropped as in the case of Tan Sri Chan Kong Choy.
“Is this recent decision by the PKA board a pre-cursor to dropping the 2nd lawsuit by PKA against KDSB (and the architect – BTA Architect) to recover RM920 million in disputed charges over the development agreement to build PKFZ?
“Will PKA’s lawsuit against former PKA General Manager OC Phang for the breach of fiduciary duties also be dropped?” he asked.
The PKFZ scandal hit the headlines in 2008, after it was revealed in an audit commissioned by Datuk Seri Ong Tee Keat — who was transport minister and MCA president at the time — that the cost had spiralled more than 10 times over its original budget.
Dr Ling — Tee Keat’s predecessor in both the ministry and MCA — had pitched the idea to create a free trade zone at the Port Klang area and turn it into a regional integrated cargo distribution and industrial park in 1997, when he was then the transport minister.
It originally was supposed to have cost RM1.1 billion but this later grew to RM4.6 billion in 2007, before an audit by accounting firm PricewaterhouseCoopers commissioned by Ong in 2008 showed that the total cost including interest payments was projected to hit RM12.5 billion.
On October 25 last year, the High Court acquitted Dr Ling of having cheated the Cabinet into approving a land purchase for the PKFZ project, ruling that his lawyers had raised reasonable doubt in the prosecution’s case.
