'PKA financially weak even before developing PKFZ'
S PathmawathyPublished: Aug 4, 2011 8:32 AM | Updated: Aug 5, 2011 8:17 AM
The project owners of the Port Klang Free Zone (PKFZ) were “financially weak” even before embarking to develop the mega transhipment hub in November 2002, the Kuala Lumpur High Court was told today.
The project owners of the Port Klang Free Zone (PKFZ) were “financially weak” even before embarking to develop the mega transhipment hub in November 2002, the Kuala Lumpur High Court was told today.
The Transport Ministry’s former deputy secretary-general (planning) Abdul Rahman Mohd Noor told Judge Ahmadi Asnawi in the corruption hearing of former transport minister Ling Liong Sik that the Port Klang Authority (PKA) was not “even able” to bear 50 percent of the land acquisition cost.
“To my understanding, PKA’s financial standing would have deteriorated further, even if the government had given a 50 percent subsidy,” said the 61-year-old.
“Buying the land would lead them to a further deficit,” he said when questioned by Deputy Public Prosecutor Tun Abdul Majid Tun Hamzah.
He revealed that PKA’s financial woes had come to light during a meeting on Nov 2, 2000 involving senior officials from the Finance Ministry, the Transport Ministry and the Valuation and Property Services Department (JPPH) as well as the PKA.
“Abdul Rahim Mokti (representative of the Finance Ministry) proposed to have PKA purchase the land themselves with a loan from the government.
“For this PKA was asked to provide a cash flow projection to evaluate whether they can afford to finance (the acquisition) and the government loan repayment,” said Abdul Rahman, adding that PKA was unable to manage the cost.
Earlier on, Abdul Rahman also testified that there should not have been an additional interest of 7.5 percent charged in acquiring the PKFZ land from Kuala Dimensi Sdn Bhd (KDSB), a company which was eventually appointed to be the turnkey contractor of the project.
Abdul Rahman, the fourth witness to testify today, agreed with the statements of officers from the JPPH that the government should not have paid an extra RM720 million for the 999.5 acres.
He opined that the RM25 psf valuation set by JPPH already calculated interest on deferred payment, and if the plot was purchased in cash the value per square foot would have been RM21.
‘All of it has been taken into account’
“In my understanding, all of it has been taken into account to arrive at that sum,” said Abdul Rahman.
According to him, KDSB’s private valuers had given a price tag of RM28 psf for their land in Pulau Indah, but the government valuers insisted that the cost should not exceed RM25 psf.
Asked why the Transport Ministry did not hire a private valuer to do the job instead of turning to JPPH, he said: “In my opinion, JPPH is the government department that will valuate all land the government intends to acquire,” he said.
Abdul Rahman said during various discussions over the PKFZ land purchase there might have been contentions between JPPH and KDSB over “possible double-counting” in the latter’s valuations.
However, he was not to able to elaborate as he could not recall the details.
The prosecution has amended one principal and two optional charges against Ling in relation to the PKFZ project.
Ling, 68, pleaded not guilty before High Court judge Justice Ahmadi Asnawi yesterday.
He faces an amended principal charge of deceiving the government by concealing an additional interest rate of 7.5 percent per annum to the cabinet for the purchase of 999.5 acres of land in Pulau Indah for the trans shipment hub project.
He was said to have committed the offence at the Prime Minister's Office in Putrajaya between Sept 25 and Nov 6, 2002.
The interest rate was based on a rate of RM25 per sq ft, which worked out to RM1,088,456,000.
Ling is accused of having committed deception with the knowledge it could cause wrongful losses to the government and despite being bound by a fiduciary duty to protect the government.
Ling also faces two optional charges:
The Transport Ministry’s former deputy secretary-general (planning) Abdul Rahman Mohd Noor told Judge Ahmadi Asnawi in the corruption hearing of former transport minister Ling Liong Sik that the Port Klang Authority (PKA) was not “even able” to bear 50 percent of the land acquisition cost.
“To my understanding, PKA’s financial standing would have deteriorated further, even if the government had given a 50 percent subsidy,” said the 61-year-old.
“Buying the land would lead them to a further deficit,” he said when questioned by Deputy Public Prosecutor Tun Abdul Majid Tun Hamzah.
He revealed that PKA’s financial woes had come to light during a meeting on Nov 2, 2000 involving senior officials from the Finance Ministry, the Transport Ministry and the Valuation and Property Services Department (JPPH) as well as the PKA.
“Abdul Rahim Mokti (representative of the Finance Ministry) proposed to have PKA purchase the land themselves with a loan from the government.
“For this PKA was asked to provide a cash flow projection to evaluate whether they can afford to finance (the acquisition) and the government loan repayment,” said Abdul Rahman, adding that PKA was unable to manage the cost.
Earlier on, Abdul Rahman also testified that there should not have been an additional interest of 7.5 percent charged in acquiring the PKFZ land from Kuala Dimensi Sdn Bhd (KDSB), a company which was eventually appointed to be the turnkey contractor of the project.
Abdul Rahman, the fourth witness to testify today, agreed with the statements of officers from the JPPH that the government should not have paid an extra RM720 million for the 999.5 acres.
He opined that the RM25 psf valuation set by JPPH already calculated interest on deferred payment, and if the plot was purchased in cash the value per square foot would have been RM21.
‘All of it has been taken into account’
“In my understanding, all of it has been taken into account to arrive at that sum,” said Abdul Rahman.
According to him, KDSB’s private valuers had given a price tag of RM28 psf for their land in Pulau Indah, but the government valuers insisted that the cost should not exceed RM25 psf.
Asked why the Transport Ministry did not hire a private valuer to do the job instead of turning to JPPH, he said: “In my opinion, JPPH is the government department that will valuate all land the government intends to acquire,” he said.
Abdul Rahman said during various discussions over the PKFZ land purchase there might have been contentions between JPPH and KDSB over “possible double-counting” in the latter’s valuations.
However, he was not to able to elaborate as he could not recall the details.
The prosecution has amended one principal and two optional charges against Ling in relation to the PKFZ project.Ling, 68, pleaded not guilty before High Court judge Justice Ahmadi Asnawi yesterday.
He faces an amended principal charge of deceiving the government by concealing an additional interest rate of 7.5 percent per annum to the cabinet for the purchase of 999.5 acres of land in Pulau Indah for the trans shipment hub project.
He was said to have committed the offence at the Prime Minister's Office in Putrajaya between Sept 25 and Nov 6, 2002.
The interest rate was based on a rate of RM25 per sq ft, which worked out to RM1,088,456,000.
Ling is accused of having committed deception with the knowledge it could cause wrongful losses to the government and despite being bound by a fiduciary duty to protect the government.
Ling also faces two optional charges:
- Cheating the government by not revealing to the cabinet the facts relating to the interest rate;
- Cheating the cabinet into believing that the facts relating to the purchase of the land at the rate of RM25 psf and interest rate at 7.5 percent were approved and agreed to by the JPPH, an agency under the Finance Ministry, when he knew there was no such consent.
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