Legal suits add to PKA’s woes


(The Malaysian Insider) KUALA LUMPUR, June 2 — As the government reels from the fallout over the RM12.5 billion Port Klang Free Zone (PKFZ) scandal, contractors are now piling on the pressure with legal action.

One suit has been filed and at least another is being prepared against the Port Klang Authority (PKA), the statutory body which governs the industrial zone.

Kuala Dimensi Sdn Bhd (KDSB), the turnkey developer for the project, spent yesterday preparing its “task force” of accountants and lawyers to seek redress over what it had called a “mischievous” report by PricewaterhouseCoopers (PwC).

The turnkey developer is the chief contractor responsible for ensuring completion of the project and with all work for PKFZ awarded to it, it was implicated in the “position review” by the audit firm.

With Barisan Nasional (BN) politicians like backbenchers chief Datuk Seri Tiong King Sing and former Umno treasurer Datuk Seri Abdul Azim Mohd Zabidi currently on the board of KDSB and others such as Deputy Finance Minister Datuk Chor Chee Heung having previously been directors in related companies under the Wijaya Baru group, it appears to be a case of friendly fire to distance themselves from the project that is now a political minefield.

The report suggests that PKA overpaid for the earmarked land owned by KDSB and its subsequent dealings were mired in “potential conflicts of interest”.

“By saying we overcharged interest, for example, it makes us look like we were profiteering,” deputy group chief executive officer Datuk Faizal Abdullah told The Malaysian Insider.

He was also unhappy the report did not detail the interim events that led to the final figures, as well as how the final numbers were crunched out.

He pointed out that the company was contracted for face value land and development work worth RM3.5 billion and interest on deferred payment had only escalated cost to RM4.9 billion. On top of this, he claimed that only RM360 million had been remitted to the company as it had given a four-year grace period after work was completed before payment began.

Despite this, PKFZ will cost another RM2.6 billion in interest as it had to take a soft loan from the government to pay KDSB, and PwC estimates that it will need to refinance this loan at the cost of another RM5 billion, amounting to a total outlay of RM12.5 billion that will only conclude in 2051.

Faizal asserted that legal action was definitely in the offing and that both PKA and PwC could both be sued.

Meanwhile, a suit was filed at the Kuala Lumpur High Court yesterday by an unknown contractor against PKA. Sources close to the PKFZ project said that it was by a consultant who had advised on matters concerning the refinancing of the loans.

The legal firm handling the case refused to divulge any details but it is understood that damages being sought amount to over RM100 million. Such a figure suggests that the suit concerned more than just unpaid services but perhaps also redress for defamation.



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