PKFZ report clears legal hurdle as pressure mounts on Tee Keat

(The Malaysian Insider) – The path has been cleared for the public release of the Port Klang Free Zone (PKFZ) audit report after the Port Klang Authority (PKA) said it will indemnify the auditors PriceWaterhouseCoopers (PwC) today.

PKA chairman Datuk Lee Hwa Beng said today he is now powerless to make the report public as the matter is being deliberated by the Cabinet which means the pressure to release the report now hangs on the shoulder of the government.

Lee said after consulting with their lawyers, he and his board members decided that it was alright to issue PwC the much sought letter of indemnity which gives legal protection should they be sued for the report.

It is learnt that many figures including Barisan Nasional politicians have been named in the report and are considering suing PwC for defamation once the report is made public.

“In the event that PwC is being sued for its report, we can counter-sue PwC for negligence,” he told a press conference held at PKA's office here.

The latest development comes on the heels of reports that the Malaysian Anti-Corruption Commission (MACC) has also initiated an investigation into allegations that the cost of the project had possibly ballooned to RM7.5 billion from an initial cost of RM2.5 billion.

Commenting on this, Lee said the anti-graft body began its investigation even before he was appointed as PKA's chairman on April 1 last year. “We will give them our fullest cooperation,” he said.

Transport Minister Ong Tee Keat has come under intense pressure to release the report which had cost his predecessor his job in the Barisan Nasional (BN) Cabinet.

The DAP's Lim Kit Siang said today: “Ong now says that the question of whether the PwC report on the PKFZ scandal will be made public rests with the Cabinet.

“This is most unbelievable! Wasn’t it Ong himself who issued a categorical, even commanding, instruction to the PKA on April 29 to release the PwC audit report on the PKFZ to the public within seven days?”

According to a sources story in The Sun newspaper recently, the PwC report contains evidence of various questionable decisions and actions, like the selling price of the controversial PKFZ site to the PKA, haphazard project costing and agreements drawn up to the detriment of the PKA.

The 405ha PKFZ transhipment hub, which has warehouses, office blocks and a four-star hotel, has been dogged by controversy ever since it was revealed that its original development cost had ballooned from less than RM2.5 billion to up to RM4.6 billion.

There were also questions about possible kickbacks after it was disclosed that several individuals had acquired the piece of land where the PKFZ now sits at RM3 per sq ft in 1999. The PKA later acquired the land at RM25psf.

The PKFZ ran into further problems when the management company Jebel Ali Free Zone International terminated its contract in 2007.

Former Transport Minister Tan Sri Chan Kong Choy was dropped as the Barisan Nasional candidate for the general election last year and subsequently lost his job largely due to the way the PKFZ debacle was handled.