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Heads must roll, whether in Cabinet, Finance or Transport Ministry for the RM4.6 billion Port Klang Free Zone scandal or the Abdullah premiership’s campaign for integrity, accountability and good governance will be completely in tatters

Media Statement   
by Lim Kit Siang  

(Parliament, Saturday): The RM4.6 billion Port Klang Free Zone (PKFZ) scandal will be top agenda in the forthcoming parliamentary meeting – as I have submitted a question asking the Finance Minister to explain in the first week of next Parliament later this month why the multi-billion ringgit malpractices and cost overruns were not checked despite warnings from Attorney-General and Auditor-General. 

I also wanted to know whether the Federal Government has now decided to bail out the RM4.6 billion PKFZ project with taxpayers’ money. 

It is most regrettable and irresponsible on the part of both the Finance Minister and Transport Minister that they had maintained a deafening silence despite many disturbing reports in the past two months about the RM4.6 billion PKFZ scandal – in particular recent reports in Malaysiakini and Singapore Business Times, viz: 

  • That the development costs for PKFZ have ballooned to RM4.63 billion from the original estimate of RM1.1 billion;

  • That the government has to step in to salvage the 405-hectare PKFZ project with a bail-out package as a result of massive cost overruns;

  • The PKFZ had been approved on the assurances that it would both feasible and self-financing. It has proved to be neither.

  • The controversy over the purchase of the 1,000 acres for the PKFZ, with the Finance Ministry and Attorney-General Chambers proposing forcible land acquisition at official valuations – then RM10 a sq foot – but the port authority got its way to buy it at RM25 per sq foot on a willing-buyer-willing-seller basis and the Transport Ministry’s assurance that the PKFZ would be both feasible and self-financing.

  • The multi-billion ringgit cost overruns were unauthorized and therefore illegal as any RM100 million increase in a project’s cost had to be approved first by the Ministry of Finance, which had not been done.

  • The Transport Minister had illegally and without sanction from the Finance Ministry issued letters of support to enable Kuala Dimensi, the private company tasked by the Port Klang Authority to develop the site, to issue bonds in excess of RM4 billion to cover its costs – the totality of which have now to be bailed out by the Federal Government. The unauthorized and unlawful letters of support by the Minister of Transport “were instrumental in getting the bonds at the time a triple-A rating” as such letters “are akin to government guarantees”.

  • The Cabinet has ordered the Chief Secretary to investigate whether the Transport Ministry had wrongly issued the letters of support which has resulted in the RM4.6 billion PKFZ scandal.

Has the Prime Minister, Datuk Seri Abdullah Ahmad Badawi given his approval for the first multi-billion ringgit bail-out operation in his premiership? 

The question Parliament and Malaysians want to know is why should the public coffers be taxed to bail out the RM4.6 billion PKFZ scandal when the project was from the beginning conceived to be self-financing, without having to use a single sen of public funds? 

The next question is why nobody in Cabinet, the Finance Ministry and the Transport Ministry is being held responsible for the RM4.6 billion scandal, when those responsible for such a colossal loss of public funds should not only face disciplinary action but should be hauled to court to face the full consequences of their RM4.6 billion misdeeds? 

As the RM4.6 billion PKFZ scandal is the first mega scandal to erupt in his premiership, Abdullah must ensure that there is no continued culture of impunity with him adhering fully with the principles of responsibility, accountability and transparency in accordance with the National Integrity Plan which he launched in May 2004. 

Heads must roll for the RM4.6 billion scandal before any bail-out for the mega-scandal can be contemplated by Cabinet and Parliament.  

Abdullah should realize that if Malaysians continue to see the perpetuation of the culture of impunity like previous mega scandals of “heinous crimes without criminals”, the Prime Minister’s campaign for integrity, accountability and good governance will be completely in tatters.   

Furthermore, he will be personally assuming responsibility for the RM4.6 billion PKFZ scandal since he will be seen to be protecting all those whether in Cabinet, Finance Ministry or Transport Ministry who should be bearing responsibility for the PKFZ scandal.


* Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman

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