Why Dubai’s JAFZA abandoned PKFZ?

ARCHIVES 2009

By MT Webmaster On Jun 2, 2009

Noel Gulliver was escorted from his office to the Immigration Department for "being in gainful employment without a work permit" – although the agreement between Jafza and Port Klang Authority (PKA) indicates that it is PKA’s responsibility to obtain a permit for Gulliver.

THE CORRIDORS OF POWER

Malaysia Today

The volume of investigations became so exhaustive that colleague Terence Fernandez came on board to jointly get to the bottom of it all. It was then that we discovered the "real" issue relating to the abrupt departure of Dubai-based Jebel Ali Free Zone (Jafza) which was contracted to manage the PKFZ.

We wrote: The separation was acrimonious. The correspondence between both parties which we obtained, include strongly-worded e-mails, disclose that Jafza bailed out because of bureaucracy, interference by politicians and others with vested interests, deliberate incorrect minuting of meetings and even attempts at tax evasion by the Malaysian negotiators.

A turf war also erupted over Noel Gulliver, Jafza’s man, who was PKFZ general manager. He was escorted from his office to the Immigration Department for "being in gainful employment without a work permit" – although the agreement between Jafza and Port Klang Authority (PKA) indicates that it is PKA’s responsibility to obtain a permit for Gulliver.

The dossier, which borders on deceit and lies, points the cause of the collapse of the deal between Jafza and PKFZ at the government machinery and one woman – PKA chairwoman and general manager Datin Paduka O.C. Phang.

http://1426.blogspot.com/2009/06/why-dubais-jafza-abandoned-pkfz.html

*******************************************************

Now, get back what belongs to us

Citizen Nades – By R. Nadeswaran, The Sun

IT was a trip to be remembered. The 40-minute drive in mid-2004 to Southern Park in Klang was at the invitation of neighbours of a Klang High School mate – Krishnan Tan – a man with a passion for sports, especially rugby. In his neighbourhood, someone had plonked a brick building on a playing field which residents used for sports and recreational activities under the pretext of providing a Rukun Tetangga base. Residents objected but no one would listen. The political force over-rode the people’s will. Appeals were dismissed summarily and only a court order prevented its completion. Today, the uncompleted structure is a standing monument which does justice to the political tsunami of March 8. It was at this meeting that someone whispered about the "Port Klang Free Trade Zone (PKFZ)".

While the stalemate on the building was the subject of my column and since it involved land, there was a small rejoinder at the bottom on how land meant for the PKFZ was "traded" by some well-known local politicians and their families. And that was the first time Malaysians ever knew about what has now become the "RM12 billion scandal" dwarfing the Bumiptra Malaysia Finance fiasco which cost taxpayers a whopping RM3 billion in the Eighties.

In the following months, theSun’s investigative team kept its focus on the PKFZ while exposing other irregularities including the infamous Zakaria’s palace in Port Klang. In between, I had written about the deals that had taken place and implications to the taxpayer. In August 2005, the first signs of the humongous problems that lay uncovered in the archives of the Klang Port Authority (KPA) were made public. We managed to lay our hands on the auditor-general’s report, which among others, touched on the precarious position it was in.

I wrote: The Port Klang Authority (PKA) could be heading for financial trouble. If government funding is not forthcoming, it could be wound up by parties it entered into agreements with, as it does not have the necessary funds to go through with projects costing in excess of RM2 billion. Well, that’s not my view but that of the auditor-general (AG), in his report contained in the authority’s 2003 annual report.

The AG’s report, it says that the agreement states that PKA paid a 10% advance amounting to RM108.85 million and the balance of RM1.7 billion is to be paid over 10 years from 2007 until 2017, with annual payments of between RM130 million and RM179 million. This is not the only troubled transaction. According to the AG, the PKA signed another agreement in 2003 with the same company to develop the project for RM519 million.

Here’s the clincher from the AG’s report: In early 2004, the PKA again signed a supplementary agreement with the same company. Through this agreement, the project development cost has increased to RM1.3 billion.

This capital outlay for the development of the project will be advanced by the company and PKA will pay RM100 million in 2004, with the balance to be paid from 2007 until 2012, an annual payment basis ranging from RM53.89 million to RM230 million … the authority does not have sufficient financial resources to meet this obligation. The PKA’s income before tax was between RM500,000 and RM21.19 million, whilst income after tax was between a deficit of RM1.52 million to a surplus of RM16.31 million. Based on PKA’s financial position, we are of the view that the PKA needs to look for sources of financing to meet the capital obligation of RM2.90 billion from 2007 to 2017."

This is an astonishing scenario and the bleak prospect that taxpayers’ funds are going to be used to bail out an ill-thought out and ill-conceived idea is frightening indeed. (emphasis is the writer’s) (http://www.sun2surf.com/article.cfm?id=10626)

Despite an authoritative report from none other than the auditor-general, no one moved. The then PKA chairman, Datuk Yap Pian Hon turned up at the office for a chat offering no answers and neither understanding the depth of the problem. Overtures were made by third parties which even led to one confrontation on the basis that I should not write anything more because "it was Dr Mahathir’s project" which I refused to believe. In Parliament the then Transport Minister Datuk Seri Chan Kong Choy denied allegations that the Port Klang Free Zone (PKFZ) project is a failure.

In a written answer to Lim Kit Siang (DAP-Ipoh Timur), he said despite the PKFZ having only begun operations on Nov 1, 2006, it had attracted 30 investors with investments totalling about RM725 million and offering 809 jobs. "There is no hanky panky involved in the implementation of PKFZ. This project was approved by the government," the Hansard quoted him as saying.

Then, we discovered that (PKA) bought land meant for the PKFZ well aware that it was encumbered property. This, say government sources, is highly irregular as anything the government and its agencies buy must have a clean title. PKA entered into discussions with Kuala Dimensi Sdn Bhd (KDSB) in 2001 to buy 404ha. At RM25 a sq ft, the deal was worth over RM1 billion.

On signing the sale and purchase agreement in late 2002, PKA paid 10% of the purchase price. The state government had originally alienated the land to the Pulau Lumut Development Co-operative (KPPL) which in turn sold it to KDSB for RM3 a sq ft. It was noted that the chairman of KPPL at the time of the sale – Sementa Assemblyman and state executive councillor Datuk Abdul Rahman Palil – was also a director of PKA.

When the sale to PKA became public knowledge, several members of the co-operative put private caveats on the land to prevent any sale without their interests being considered. Besides, at the time of the PKA-Kuala Dimensi deal, there were at least "five or six" further interests registered on the titles by mortgagors. Several months after the purchase, the government and PKA were advised that misrepresentation had been made in the deal and that it was not a "willing buyer, willing seller" arrangement, as KDSB could not transfer the land free of encumbrances. However, KDSB director Faizal Abdullah told theSun that the transfer took place within a year of the signing and PKA owns 100% of the land. "Anyone who says otherwise is lying," he said. (www.sun2surf.com/article.cfm?id=19026)

Over the years, we have written dozens of stories on the wrongdoings. Today, five years after theSun broke the story and after denials, clarifications and the lot, we stand vindicated. The report prepared by PriceWaterhouse-Coopers is testimony to why we chose to pursue the issue relentlessly – taxpayers’ money was involved but there seemed to be neither transparency nor accountability – the cornerstones of good governance. The figures quoted in our reports may not have been spot-on but the facts remain.

So, what happens next? Will those who were responsible for this debacle be brought to book? Will they be punished for their wrongdoings, if any? Will the government make a concerted effort to recover the money that was taken away? Will those responsible be named and shamed?

In the past, several such reports and findings of royal commissions of inquiry have just been an exercise to appease the public. Remember the fire and the explosions at the Bright Sparklers factory in Sungai Buloh? What happened to the findings of that report?

Well, for Prime Minister Datuk Seri Najib Abdul Razak, this is a golden opportunity to send the message to all and sundry that he will not tolerate any wrongdoing, misuse of power and the lot. It is obvious that overtures and appeals would be made to "close the case" as has happened in the past. We believe that he will allow the law to take its course. It is not his nature to sweep things under the carpet.

In the meantime, the PKA board must work with their lawyers with a view to initiating civil action to recover monies which rightfully belong to taxpayers. Movements of assets may already be taking place and hence the issue of obtaining Anton Pillar orders for freezing the assets – local and abroad – of those involved must be a priority.