The parliamentary Public Account Committee (PAC) is not satisfied with the explanation given by Port Klang Authority (PKA) when the two parties met today.

PAC chairperson Shahrir Samad told reporters after the meeting in Parliament that it resulted in "more questions than answers".

"We will be meeting PKA officers again during the fasting month to further clarify issues surrounding the Port Klang Free Zone (PKFZ)," he said.

Shahrir said that the next meeting will also see the participation of the Valuation Department and Securities Commission.

"We hope with the presence of the Valuation Department, we could settle the matter of land purchase from PKFZ developer Kuala Dimensi Sdn Bhd in 2002," Sharir said.

He added that the Securities Commission will be asked to explain the issuance of bonds worth RM4.6 billion to Kuala Dimensi.

Shahrir, who refused to reveal details of the meeting, said today's meeting with PKFZ officials led by its chairperson OC Phang was "unsatisfactory" and explained that the committee will examine the financial procedures and possible mismanagement of public funds.

"We still need to nail down the real cost of the land purchased from KDSB (Kuala Dimensi) and why many of the financial procedures in the purchase were ignored," he said.

Shahrir described the PKFZ problem may be bigger that what was reported in the media.

"We will look into government's involvement in this project and how much of its support has been offered to PKFZ," he said.

"The latest news we have received is that the government is not bailing out the project but it is only giving a soft loan, which will have to be paid back," he said.

"But we still need to know how the bonds were issued. Maybe the Finance Ministry does not know about it, but how is it possible for it not to be aware of such bonds being issued?" he asked.

Auditor-General's report

Kuala Dimensi had raised funds for the project through the issuance of bonds. Bonds with government guarantees are usually only issued by the Finance Ministry.

Shahrir also pointed out the Auditor-General's report on the financial state of PKFZ for the year 2005.

According to him, the report notes that PKA's liquidity at December 2005 consisted of cash in bank and fixed deposits amounting to RM231.75 million, while its surplus after tax was RM26.63 million.

As such, PKA needs "to look for sources of financing to meet its capital obligation which amounted to RM4.11 billion".

In response to that, PKA said the initial costs will be borne by internal sources while for the subsequent payment it plans to obtain loans from financial institutions with the guarantee of the Malaysian government.

Shahrir also noted that the Auditor-General's report on the financial state of PKFZ in 2004 also came to a similar conclusion.

"The report has stated that PKA needs to look for sources to meet its capital obligation of RM2.9 billion in 2004. It was RM4.11 billion in 2005 and for this year, we all know the amount has become RM4.6 billion," he said.

"So if you have to pay back so much of money, you have to ask how much the project will yield in terms of revenue," Shahrir added.


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