Set up a Royal Commission of Enquiry to enquire into PKFZ major scandal

DAP National Deputy Chairman and MP for Kepong Dr Tan Seng Giaw proposes that the Federal Government set up a Royal Commission of Enquiry on the Port Klang Free Zone (PKFZ) major scandal. Only such a commission would have the power to investigate those who are supposed to be well connected. To whom does the huge fund flow?

On 10.6.2009, Dr Tan put up the proposal at the DAP forum at the Kuala Lumpur-Selangor Chinese Assembly Hall. PKFZ is on 1,000-acre Pulau Indah.

The Federal Government Cabinet approved the PKFZ project in 1999, with the initial capital outlay of RM 1.9 billion, increasing to RM 7.5billion by 2007. If the Port Klang Authority (PKA) delays payment to the soft loan, the amount plus interests may rocket to RM12.5 billion by 2012.

The recent PriceWaterHouseCooper report on PKFZ reveals weaknesses such as land value skyrocketing, bad administration and project management problems.

The Transport Minister cannot authorize letter of guarantee. But, from 2003 onwards, Transport Ministers issued four letters of comfort to support PKFZ without following the treasury procedures. The main benefactor has been Kuala Dimensi Sdn Bhd.

Normally, when the Government has a project, it enforces Section 4 of the Land Acquisition Act to stop land price speculation. For example, the Kuala Lumpur International Airport (KLIA) situates on beautiful oil palm land. Section 4 was enforced. In the case of PKFZ onlySection 3A was invoked, giving the contractor a freehand to manipulate the land value. The recommendation of the Attorney-General to acquire the land was ignored. If the Government had acquired the Pulau Indah land, the value was RM10 per square foot; it had been sold to PKA at RM25 per square foot.

By May 2004, PKA realized that it could not comply with the Cabinet decision that PKFZ must be self-financing. It boggles the mind that PKA still went on to sign 8 more contracts, costing hundreds of million.

To whom has the fund flowed? It is mysterious. Lim Kit Siang reminds the people that the huge fund can make KL cityfolks stop paying assessment for more than 10 years or may be used to build 25 universities.

We need a Royal Commission to enquire into the PKFZ major scandal, looking for the culprits who should be charged in court.

Dr Tan Seng Giaw