The government has taken all relevant factors into account in making the Port Klang Authority (PKA) meet its bond payment obligations in the Port Klang Free Zone (PKFZ) project, Bernama reported the transport ministry as saying in a statement yesterday.
PKA had also given an undertaking to make payment to the special purposes vehicles (SPVs) established by PKFZ’s turnkey contractor Kuala Dimensi Sdn Bhd (KDSB), according to the ministry’s statement.
PKA must make payment to the SPVs as set out in the payment schedule, it said.
In making the decision, it said the government had taken all relevant factors under consideration, including the government’s commitment to bondholders and PKA’s obligations under the agreements signed.
As at press time, it was learnt that PKA had not received any directive in writing from the ministry.
PKA is scheduled to hold its board meeting today to discuss the final payment of RM222.58 million to Free Zone Capital Sdn Bhd (FZCB), one of the four SPVs.
On Tuesday, The Edge Financial Daily reported that PKA board had decided not to pay FZCB in view of the port authority’s RM1.4 billion suit against KDSB for alleged wrongful and excessive claims on work done for PKFZ, among other claims.
It was learnt that the directors did not want to be held liable in the event PKA wins its suit against KDSB and there is no money to recover.
Section 3 (4) of the Port Authority Act 1963 empowers the Transport Minister to override a decision by the port authority as long as such orders are not inconsistent with the Act.
Responding to the report, Transport Minister Datuk Seri Kong Cho Ha had said he would direct PKA to make the payments. Subsequently, PKA chairman Datuk Lee Hwa Beng said the port authority would act as directed by the minister.
This article appeared in The Edge Financial Daily, July 29, 2010.
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