Sunday, February 08, 2009

Another PKFZ in the making ...

Asia Petroleum Hub, Johor

The Malaysian Insider, here, has quoted a Singapore The Straits Times (TST) report today that a worsening ownership battle for a planned Malaysian bunkering facility on a reclaimed island in Johor (photo) to rival Singapore’s is threatening to derail the project and could hurt CIMB, one of the country’s largest commercial banks.

It appears that the project leader, a little-known private company called KIC Oil and Gas, has so far drawn down nearly half of its RM1.4 billion financing facility from CIMB to fund construction work. But it has failed to resolve problems with another key shareholder of the project, Seaport Terminal, which owns both the Johor ports of Pasir Gudang and Pelabuhan Tanjung Pelepas (PTP). This has prompted CIMB to consider suspending further funding for the construction.

Questions are now being raised over the viability of the project because the government has decided to hold back on its pledge to put in place the necessary infrastructure, valued at roughly RM350 million for roadworks and other utilities, until the shareholder row is resolved.

KIC insists that it is the rightful developer of the planned petroleum hub after it won rights to lease the island in July 2005 from the Ministry of Transport, but Seaport is disputing the award on grounds that the MoT's move to lease the 40ha reclaimed island to KIC violates an earlier privatisation agreement the company had with the government.

TST has also reported that in a bid to resolve the stalemate, the Malaysian government has decided to dictate the shareholding structure for Asia Petroleum Hub (APH), the company which was awarded rights to build and operate the bunkering facility.

Under the plan, KIC was awarded a 40 per cent interest in the project, while Seaport Terminal was given a 35 per cent shareholding. The remaining 25 per cent in APH was split between two other entities. All four parties have yet to sign a shareholders’ agreement but KIC has led construction work for the project with funding from CIMB. Who is behind MoT's decision to award rights to lease the reclaimed island to KIC and why the funding was released before the ownership problems are resolved remains unclear.

Its crystal clear to me, old bean.


  1. Captain!

    Nothing is going to happen to CIMB. It belongs to the little brother of you know who and besides it wont be the first time the gomen has bailed out this bank.

    Like you said: greed to the fore!

  2. Captain, Thks for the highlight. Being a nincompoup in marine works, i am just wondering out loud why PTP/Pasir Gudang did not have its own bunkering facilities which will be more viable and feasible as compared to the construction of Asia Petroleum hub. Is Seaport losing its political clout?

    Which also leads to another question. It was widely circulated that the higher Malaysian marine fuel price prompts the vessels to bunker in our southerly neighbour.

    Putting the pieces together, is this another "KLIA- east" project pushed through "midnight regulation"? I sincerely hope that Cap can track the APH progress as it may be another of those "scam the public" project...

    Till then...G'nite M'sia...wherever u are...

  3. Wow. Dies it mean CIMB will have 1.3B RM NPL coming up.

    How come no cabinet decision on this?

  4. Captain,
    If not for the blogs, nothing like this will be known however massive the scale is. Such fiascos will definitely bankrupt the nation. Some people will still benefit though.

  5. Capt there is also another one which is under the radar which is the LPK quarters along per raja muda musa.This one is worth looking at as it also has links to perak monarchy.
    The whole project was suppose to be with 2 tower blocks for housing but only the shops were done.

  6. A KIC Oil & Gas affidavit filed in Singapore High Court ...

    KIC's admitted using fake documents to obtain RM120M loan from Ministry of Finance, MDV

    Was this the reason about their PDZ pull-out?


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