PKFZ: Govt must prove sceptics wrong

Kudos to the government for finally holding one of the key figures in the Port Klang Free Zone (PKFZ) saga to account.

The past few years have certainly been hard for the government because of the endless criticism it has faced for not getting to the bottom of one of the country’s biggest scandals.

By charging former transport minister Tun Dr Ling Liong Sik with misleading the cabinet in the purchase of land for the PKFZ project, the government has shown that it means business.

Having said that, cleaning up the mess in PKFZ can be likened to a long and winding road.

With Ling brought to book, the people would expect other actors in the saga to face the music too. While the former general manager of the Port Klang Authority (PKA), Datin Paduka OC Phang, will have her day in court in the coming months, questions remain whether the government would also take action against another former transport minister, Tan Sri Chan Kong Choy, for issuing three letters of support which were used to raise funds from the bond market.

Then there is the issue of the payment of the bonds, which will continue until 2017. While the ministry of finance (MoF) has given PKA a 20-year soft loan of RM4.6 billion to meet its debt obligation, PKA’s financial projection shows that it would not be able to meet its repayment schedule to MoF come 2011. Failure to restructure the loan will result in the final total cost ballooning to RM12.4 billion.

The question of whether PKA should hold back payments to the bondholders also arises at this juncture as the port authority is embroiled in lawsuits against Kuala Dimensi Sdn Bhd (KDSB) for alleged fraud and over-billing, amongst other things, totalling RM1.4 billion. The PKA board of directors is said to be against making payment because it does not want to be liable in the event PKA wins its suits but there is no money to recover.

However, Transport Minister Datuk Seri Kong Cho Ha had directed PKA to make the payment that is due on Saturday, especially the final tranche of RM222.58 million due to Free Zone Capital Bhd (FZCB).

The authorities must decide if it should hold back a certain amount of money pending the outcome of the suit, and whether it has the legal right to do so. It is after all taxpayers’ money.

The super task force, set up nearly a year ago to come up with a transformation plan for the mega transshipment hub, has remained silent. The clock ticks away as the task force, headed by the chief secretary to the government, takes its time to decide how to make PKFZ viable.

A glance at the websites and other social networking media shows that the people, by and large, remain sceptical of the government and its actions.

While many applaud the government for reeling in a “big fish”, many continue to question if this is merely a drama that would end in an acquittal or a slap on the wrist.

The Barisan Nasional government has a good chance to score brownie points if it tackles this issue well. For once, the doubting rakyat would like to be proven wrong.

This article appeared in The Edge Financial Daily, July 30, 2010.