'Variation clause allows cost increase in PKFZ project'
Published: Jul 1, 2011 11:01 PM | Updated: Jul 1, 2011 11:04 PM
The Sessions Court at the trial of three people charged with cheating OSK Trustees in the Port Klang Free Zone (PKFZ) development project today heard the cost increase from RM400 million to more than RM1 billion was based, among others, on the “variation order” clause contained in the original agreement.
The Sessions Court heard the cost increase from RM400 million to more than RM1 billion was based on the 'variation order' clause.
The Sessions Court at the trial of three people charged with cheating OSK Trustees in the Port Klang Free Zone (PKFZ) development project today heard the cost increase from RM400 million to more than RM1 billion was based, among others, on the “variation order” clause contained in the original agreement.
In the dock were former Kuala Dimensi Sdn Bhd project manager Law Jenn Dong, 53, architect Bernard Tan Seng Swee, 50, of BTA Architect and Kuala Dimensi chief operations officer Stephen Abok, 53.
Second prosecution witness Fazeilah Surkisah Mohammad, 46, the legal adviser of Port Klang Authority (PKA), under cross-examination by Law’s counsel, Tan Hock Chuan, explained the meaning of the variation order on the fourth day of the hearing.
“A variation order is an approval to modify the specifications or project and this was provided for in the original agreement dated Feb 27, 2003 between Port Klang Authority and Kuala Dimensi Sdn Bhd for the development of PKFZ,” she said.
She agreed with counsel that the variation order would inevitably vary the development costs as it was maintained in the additional agreement signed by both parties on March 27, 2004 which saw the entire 400 hectares of the project area being developed in one phase, instead of two.
Fazeilah Surkisah agreed with Tan when he told the witness that since there was government approval to implement the whole project in one phase, and a written consent/approval from PKA for the variation order, the additional agreement was therefore valid.
However, she said, a variation order could not be enforced unless there was consent from both parties, in this respect, Kuala Dimensi and PKA.
To a question on whether the additional agreement for additional development works sealed by PKA and Kuala Dimensi on April 26, 2006, had obtained government approval, Fazeilah replied in the affirmative.
However, her reply came about only after being referred to a PKA letter dated April 19, 2006 which was tendered in court by Tan.
In the trial yesterday, the court was told that additional works costing RM335.8 million comprised concrete trenching (RM140.2 million) and construction of a 33kV power infrastructure at PKFZ’z Precinct 2 and Precinct 8 PKFZ (RM80 million).
Additional costs were also attributed to civil and infrastructure works at the PKFZ, amounting to RM30 million and RM28.1 million, respectively, while construction of the direct road from the PKFZ to West Port cost RM57.5 million.
‘Decision rests with PKA and Kuala Dimensi’
Asked whether the costs were final, Fazeilah said the decision rested with PKA and Kuala Dimensi.
The prosecution was represented by head of the Forfeiture of Property Unit in the Attorney-General’s Chambers, Dzulkifli Ahmad, and deputy public prosecutor Anas Mahadzir.
Hisham Teh Poh Teik appeared for Abok while Bernard Tan was represented by V Sithambaram.
Judge Asmadi Husin adjourned hearing to next Wednesday.
- Bernama
In the dock were former Kuala Dimensi Sdn Bhd project manager Law Jenn Dong, 53, architect Bernard Tan Seng Swee, 50, of BTA Architect and Kuala Dimensi chief operations officer Stephen Abok, 53.
Second prosecution witness Fazeilah Surkisah Mohammad, 46, the legal adviser of Port Klang Authority (PKA), under cross-examination by Law’s counsel, Tan Hock Chuan, explained the meaning of the variation order on the fourth day of the hearing.
“A variation order is an approval to modify the specifications or project and this was provided for in the original agreement dated Feb 27, 2003 between Port Klang Authority and Kuala Dimensi Sdn Bhd for the development of PKFZ,” she said.
She agreed with counsel that the variation order would inevitably vary the development costs as it was maintained in the additional agreement signed by both parties on March 27, 2004 which saw the entire 400 hectares of the project area being developed in one phase, instead of two.
Fazeilah Surkisah agreed with Tan when he told the witness that since there was government approval to implement the whole project in one phase, and a written consent/approval from PKA for the variation order, the additional agreement was therefore valid.
However, she said, a variation order could not be enforced unless there was consent from both parties, in this respect, Kuala Dimensi and PKA.
To a question on whether the additional agreement for additional development works sealed by PKA and Kuala Dimensi on April 26, 2006, had obtained government approval, Fazeilah replied in the affirmative.
However, her reply came about only after being referred to a PKA letter dated April 19, 2006 which was tendered in court by Tan.
In the trial yesterday, the court was told that additional works costing RM335.8 million comprised concrete trenching (RM140.2 million) and construction of a 33kV power infrastructure at PKFZ’z Precinct 2 and Precinct 8 PKFZ (RM80 million).
Additional costs were also attributed to civil and infrastructure works at the PKFZ, amounting to RM30 million and RM28.1 million, respectively, while construction of the direct road from the PKFZ to West Port cost RM57.5 million.
‘Decision rests with PKA and Kuala Dimensi’
Asked whether the costs were final, Fazeilah said the decision rested with PKA and Kuala Dimensi.
The prosecution was represented by head of the Forfeiture of Property Unit in the Attorney-General’s Chambers, Dzulkifli Ahmad, and deputy public prosecutor Anas Mahadzir.
Hisham Teh Poh Teik appeared for Abok while Bernard Tan was represented by V Sithambaram.
Judge Asmadi Husin adjourned hearing to next Wednesday.
- Bernama
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