Wednesday, 23 December 2009

PKFZ Scandal: Imprison Those Blood-Sucking MCA Lap Dogs of UMNO

Read here for more in Malaysia Today

The Scoundrels
in the PKFZ Billion Ringgit Scam


MP BINTULU


MCA YOUTH CHIEF


(courtesy of stocktube blog)


Excerpts

Now documented evidence has started to surface about the involvement of Deputy Education Minister Wee Ka Siong (WKS) in the RM 2 billion PKFZ mess.

The latest daming documents show that Hijau Sekitar Sdn Bhd (240539-X) did consultancy work for Wijaya Baru Sdn Bhd (205953-X) on "the feasibility of a new port facility on reclaimed land at the mouth of Selat Lumut in Port Klang" in 2006.

Hijau Sekitar, established in 1992, is owned by Wee Ka Siong, who has 49,998 shares.



The remaining shareholders are one Lim Kit Siong (50,001 shares) and Wong Woon Ping (1 share).

Wijaya Baru, as we all know, is the parent company of Kuala Dimensi Sdn Bhd, the turnkey contractor which made PKFZ its own goldmine. (Please refer to the documents, including a company search).

Here's the background :
  • Back when PKFZ was starting to take shape , two prominent businessmen wanted to make some quick bucks. Westport boss Tan Sri G. Gnanalingam and Tiong King Sing each bought a piece of land adjacent to PKFZ, a project modelled after the highly-rated Jebel Ali Free Zone.

  • Being privy to the information about the massive infrastructural developments that would take shape in next door PKFZ, the duo had wanted to piggy-back on what they then thought would be a foundry for golden eggs-laying geese.

  • The duo was aided and abetted by Wee Ka Siong through his little-known consulting firm, Hijau Sekitar, which headed four other consulting firms.

  • Had PKFZ succeeded, the port facilities would have been leased to the Port Klang Authority on a long-term basis for a price more handsome than the love-struck Bung Mukhtar. Tiong King Sing and Wee Ka Siong would have made billionaire golfer Tiger Woods look like a pauper.

    In other words, Wee Ka Siong, through his buddy Tiong King Sing, wanted to have a second milking of the cash cow (the first being PKFZ proper). Credit must be given to Mastermind Wee (as lead consultant) for a plan so ingenious, it could only have been inspired by sheer greed.

  • (But) Ong Tee Keat messed up their Grand Design by opening the can of worms that is the PKFZ.

  • The A-G's Chambers and the MACC are now poring through 7 boxes of documents seized from Port Klang Authority's office on Dec 4 to determine the extent of whichWee Ka Siong breached the Official Secrets Act by acting on classified information.

  • Highly-placed sources said Wee Ka Siong will also be charged for economic plunder and grand larceny in the first two weeks of 2010. But legal problems aside, the political fallout for the MCA Youth chairman following the surfacing of such documents would even be greater.

  • The documents clearly show that Wee Ka Siong is closely linked to Tiong King Sing, who is gunning for Ong Tee Keat over the PKFZ issue. His denial of links with Tiong is now proven to be a blatant lie.

It shows whyWee Ka Siong is so impatient to topple the MCA president. Even Wee Ka Siong 's own aide in the Education Ministry used to be a staff of Wijaya Baru and was collecting a salary from Tiong King Sing .

Wee Ka Siong was also the one who laid the trap for Ong Tee Keat to board Tiong King Sing's private jet and then leaked the details in the Internet. (More of WKS's lowdown here).

The documents (read here) are only the first batch. More will be released in due time. By then, Liow Tiong Lai’s wife run-in with the MACC over the Toyota Alphard scandal will look like a noble deed.


RELATED ARTICLE

PKFZ’s RM12 Billion Scandal - Where are the Sharks?

( POSTED on May 31, 2009 by Stocktube Blog)

Read here for more on Stocktube blog

EXCERPTS

PKFZ (Port Klang Free Zone) scandal is perhaps the BIGGEST scandal the country ever had
so far from the legacy of former premier Mahathir Mohamad since the BMF scandal, that’s if you ignore the Central Bank’s losses from the foreign exchange speculation.

BMF (Bumiputra Malaysia Finance Ltd) scandal involved losses of about RM2.5 billion thanks to dubious loans to Hong Kong Carrian Group which collapsed in 1983 after the property crash. Carrian Group chairman George Tan (a Malaysian/Singaporean businessman), BMF chairman Lorraine Esme Osman (a longtime Tengku Razaleigh Hamzah associate) and BBMB (Bank Bumiputra Malaysia Berhad) executive director Mohd Mashim Shamsuddin were figures linked to the scandal.

Just like BMF scandal, the Malaysian government was trying to cover-up the PKFZ scandal but the losses just got too huge to be swept under the carpet.


The PKFZ scandal was simply too huge and the potential of losses is unlimited hence it’s too difficult not to scream the name of former Transport Ministers Chan Kong Choy and Ling Liong Sik.

The idea to transform Port Klang into a national load center and a regional transshipment hub was mooted during Mahathir’s era in 1993 under the Seventh Malaysia Plan (1996 - 2000) after the Mahathir’s administration was impressed with Jebel Ali Free Zone in Dubai.

Since its’ setup in 1985 the Jebel Ali Free Zone now spans an area of more than 12,000 acres that attracted over 6,000 tenants employing more than 130,000 employees. The Malaysian Cabinet under Mahathir approved the project in 1999 to “copy” the Jebel Ali Free Zone model and hence the birth of 405ha PKFZ (Port Klang Free Zone).

Politicians Who Made Billions

Initially PKA (or rather “Puk Kai” Authority?) entered into several agreements with KDSB (Kuala Dimensi Sdn Bhd), a wholly-owned subsidiary of Wijaya Baru Holdings Sdn Bhd (WBHSB).

Ironically WBHSB is heavily owned by several politicians from the ruling government inclusive BN backbenchers chief Tiong King Sing who owns 70% stake.

KDSB made handsome gains when it bought the land for RM3 per square foot (psf) and sold it for RM25 psf to the government although the government’s valuation was only RM10 psf.

With this purchase the project cost was at RM1.957 billion but subsequently escalated to RM3.522 billion as at 31 Dec 2008. Interest cost due to deferred payments to KDSB increased to RM1.425 billion resulting in a total project cost of RM4.947 billion.

PKA was having problem since the beginning - it had to get a 20-year soft loan of RM4.632 billion from Ministry of Finance (MOF) when it could not even pay the first scheduled payment in 2007 to KDSB. The soft loan alone would squeeze RM2.506 billion of interest cost from PKA and this would push the total project to a staggering RM7.453 billion.


(courtesy of stocktube blog)


It was reported that PKA would have no more money left between 2012 and 2041 after paying two installments to MOF and when this happen additional interest cost of approximately RM5 billion would send the PKFZ project to RM12.453 billion. And you wonder why Jebel Ali Free Zone Authority pulled out from a pact to manage PKFZ.

The PKFZ project was doomed to fail the moment the whistle was blown mainly due to PKA which basically did nothing but to rely extremely heavily on KDSB to spoon-feed the whole project.

PKA even relied solely on its quantity surveyors, QS4, to verify the costing and basically the role of PKA were, well, do almost nothing at all. To say that PKA was good for nothing is an understatement.

Who are some of the board members of PKA between 2001 and 2007?
  1. Ting Chew Peh – Pengerusi (2001 - 2003)

  2. Abdul Rahman bin Mohd Noor – Wakil Ketua Setiausaha, Transport Ministry

  3. Zubir bin Abdul Aziz – Wakil Ketua Pengarah, Unit Perancang Ekonomi, PM Office

  4. Yap Pian Hon – Pengerusi (2004 - 2006)

  5. Chor Chee Heong – Pengerusi (2007)

  6. And many more politicians and little Napoleans


PKFZ’s 20 Major Problems

PricewaterhouseCoopers has basically outlined 20 issues with PKFZ:

Issue-1:
The proposal to purchase the land was approved by the Cabinet but subsequent development proposals (2004 - 2006) which involved additional RM1.84 billion were not tabled to Cabinet for approval but were awarded to KDSB after recommendations from Minister of Transport to the Prime Minister.

Issue-2:
Even though PKA knew it was not able to meet the Cabinet’s condition on self-financing, it not only did not alert the Cabinet but miraculously had the gut to sign other development agreements and thereafter the cost balloon indefinitely. Without support from somebody as powerful as a minister, you won't dare to do so, do you?

Issue-3:
PKA board did not exercise adequate governance over the project implementation, another nice way to say the board did not know or simply clueless on was happening on the ground. Lots of things happened without the board’s approval or maybe the board didn’t care at all (close one eye?).

Issue-4:
Advice of the Attornet General was not sought to safeguard the interests of PKA and the Government (I think it should be the taxpayers’ interests instead). Worst still, compliance such as defect liability was deliberately taken out from the agreements entered with KDSB.

Issue-5:
Involvement of politicians and individuals who obviously created conflicts of interest. Chor Chee Heung, for example, was non-executive Deputy Chairman of Wijaya Baru Global Berhad (Apr’2004 – Jul’2007) and at the same time acted as Chairman of PKA (Apr’2007 – Mar’2008). In fact WBGB, KDSB, WBHSB and WBSB are all related under the umbrella of a common shareholder – Tiong King Sing.

PKFZ Scandal CompaniesStrangely enough, Perunding BE Sdn Bhd was appointed as PKA’s quantity surveyors when it had also acted as the quantity surveyor for KDSB as well. PKA and KDSB also shared the same legal adviser – Rashid Asari & Co.

Issue-6:
Interest on the MOF soft loan will increase the project cost from RM4.947 billion to RM7.453 billion and it seemed like PKA would be almost bankrupt thereafter unless the MOF soft loan is restructured otherwise the project expenditure will balloon to RM12.453 billion. MOF soft loan of 4% per-annum over a period of 20-year will slowly but surely kill PKA of which was already being squeeze by KDSB.

Issue-7:

PKA and Ministry of Transport somehow chose not to comply with MOF’s recommendation to issue government-guaranteed bonds to reduce funding cost. Obviously leakages happened when the illiterate PKA was willing to pay 7.5% per-annum charged by KDSB on deferred payments for the land purchase compared to government-guaranteed bonds coupon rates of 3.80% to 4.27%.

Issue-8:
The land was purchased at value above market value. Apparently KDSB managed to convince (or rather con?) PKA that the land was worth RM25 psf because it has “special value” as if there were huge deposit of gold or oil hidden underground. Earlier JPPH valued the land at RM17 psf in Nov 1998 and RM18 psf in May 2000.

Issue-9:
KDSB may have taken advantage of PKA, which didn’t really care about the project, by overcharged the latter for interest by between RM51 million to RM309 million in regards to the land purchase. The interest has been calculated using 6-monthly compounded basis instead of non-compounded yearly basis.

Issue-10:
DA3, which did not contain detailed specifications and scope of work, was not a “fixed sum” contract. As a result the original estimate of RM1 billion surprisingly ballooned by 21% to RM1.216 billion. KDSB later claimed additional RM121.592 million as professional fees being 10% of the final amount of RM1.216 billion – was this figure (10%) plucked from the sky since it was not mentioned in the DA3 and PKA didn’t even question it? Thus the final development cost increased by 33% from the original estimated amount of RM1 billion to RM1.337 billion. Now, who says making money from the Malaysian Government is difficult?

Issue-11:
PKA again showed its “generousity” when it allowed additional claim of RM95.256 million for general preliminaries although this cost was not specified in the DA. This was not due to stupidity on PKA but a very obvious case of leakages in broad daylight.

Issue-12:
Although KDSB did not deliver three infrastructure components (monsoon drain system, water supply system and two bridges) as specified in the land purchase agreement, the final account did not include any deduction for value of work not done.

Issue-13:
KDSB was awarded the RM1 billion development contract nine months before a project masterplan was finalized. Obviously someone very powerful whose status is nothing less than a minister had a hand on such decision. Your guess is as good as mine.

Issue-14:
PKA may not have received value for money because it depends solely on KDSB as the turnkey developer raising the question what role is PKA playing in this project.

Issue-15:
There was almost no project management and control over the project although this is a multi-billion project. It seemed the main objective was to suck up as much money as possible from the project without concern for the project deliverables.

Issue-16:

Project status as at 31 Dec 2008 – except for LIU with CF, defect liability period has expired and certain defects remain to be rectified.

Issue-17:
PKA has projected that it will be in cumulative cash deficit position in 2012 and will not be able to repay MOF soft loan installments thereafter. Potentially the PKFZ total project cost could skyrocket to more than RM12 billion.

Issue-18:

Ministry of Transport has breached Treasury regulations because it has issued four letters of support to PKA which could be construed as a guarantee that PKA would meet its obligations on a full and timely basis. Ministry of Transport needs Ministry of Finance’s approval before issue such letters.

Issue-19:
To date, PKFZ only managed to attract occupancy of only 14% which is insufficient in generating revenue to cover its operating expenses, let alone in servicing the interest costs.

Issue-20:

PKFZSB is as good as bankrupt because it has incurred losses since its incorporation and has negative shareholder’s funds as at 30 Sept 2008.


So, what’s next, Najib?

This PKA is actually a one big happy family consists of politicians from the current government BN trying to scoop their “ice creams” from the taxpayer’s money.

Politicians involved in PKFZ Scandal



The earlier version of the report may contains statement that indicate former MCA President and Transport Minister Ling Liong Sik issued the first letter of support on his last day as Transport Minister while the remaining three were issued by his successor Chan Kong Choy.

Hence it’s not fair to display the name of Chor Chee Heung (currently deputy Finance Minister) and Taikor BN backbenchers chief Tiong King Sing but also the name of former ministers such as Ling Liong Sik and Chan Kong Choy.

Just because they are no longer the minister and has retired doesn’t mean they’re immune from past involvement as far as the PKFZ scandal is concerned.

To blame the whole scandal on poor and weak management on the part of PKA is simply insulting our intelligence.

You can’t screwed up and pretended nothing happens and nobody will know and keep screwing up until there’s no turning back as can be seen with the current potential RM12.453 billion of cost overrun. That’s more than SIX times of original cost for the project.

And RM10 BILLION is a huge sum that can help thousands of poor citizens .

I’m sure many pockets of those involved would get away free, as usual.

3 comments:

Kalambong said...

It has way past the time for the citizens to take action.

It is time for us to start expanding our network of friends and relative who live outside Malaysia.

Enlist their help in finding the assets the be end goons (including M) are hiding abroad.

A friend of mine once drove me, for 3 days, across some European countryside and showed me the castles (you read it right, CASTLE) owned by Malaysians.

As he rattle off the names of those hyper-rich Malaysians, my heart sunk deeper and deeper.

Our tax-money !

Our nation’s wealth !

All stolen and end up here !!

As those castles represent only the tip of the iceberg, I like to call upon you, and all others’ help, to expand the search for hidden assets abroad.

I have heard of ranches in South America, New Zealand and Australia.

I have heard of stories.

All yet to be confirmed.

So, would you help?

Anonymous said...

Some dogs are more equal than others - George Orwell

Funny how a book published in 1945 is so relevant today.

Anonymous said...

Please someone look into Bakun Hydro Project as well. Potentially easy meat for the rightful to siphon tax payers money from such project.