Tuesday, September 18, 2007

PKFZ in Fairplay

The Public Accounts Committee (PAC) chaired by Dato Shahrir Samad will meet again on Tuesday 25th for another round of probing into the Port Klang Free Zone (PKFZ) scandal. Despite an almost complete blackout of all news on the subject by our newspapers, the international shipping weekly Fairplay, a more than a century old publication of the influential Lloyd's Register of London has again picked up this story of our national shame and featured it in a recent edition:

Fairplay International Shipping Weekly
06 Sep 2007

Klang a microcosm of Malaysia’s malaise
A scandalous land deal involving Port Klang Authority escapes public scrutiny. Jaya Prakash reports that the backlash is likely to affect coming elections.

AN EMBATTLED Port Klang Authority has escaped public scrutiny for cost overruns of more than $1Bn that have been incurred in operating a free-trade zone. The case appears to be a microcosm of a deeper malaise that runs through Malaysian business.

Port managers have spent several months battling media and public hostility over the controversial – some say scandalous – decision to acquire a land holding tagged at $7 per square foot from Malaysian company Kuala Dimensi. The same company had earlier bought the same plot at an unbelievably low price of $0.86/ft. Kuala Dimensi is headed by Azim Zabidi, who is a politician in Malaysia’s ruling United Malays National Organisation.

There have also been ethical issues involving high-ranking Port Klang Authority executives contracting work from companies in which they had pecuniary interests. This work was directed toward developing 500 warehouses in a 400ha of land in Pulau Indah. Any prospects for a full disclosure of the circumstances leading to the free-zone deal appear to have evaporated on 27 August, when Ramli Ngah Talib, speaker of Malaysia’s parliament, opposed an ‘urgent motion’ by Lim Kit Siang, leader of the country’s political opposition, for a debate on the free-zone issue. Lim spoke to Fairplay about the conflicts and stressed the importance of bringing “culprits to book”.

The free-zone issue is a test case of Prime Minister Abdullah Badawi’s 2003 pledge that the government would not bail out failing companies, declared Lim. He added that now that a bailout has indeed happened, the government’s move amounts to a “U-turn” of Badawi’s pledge. The debacle only scratches the surface of something deeper and more sinister, he continued. “It has to do with the entire system,” he warned, leaving few in any doubt that the issues go wider than just the managers at Port Klang Authority.

In 2003, the port authority was declared “financially insolvent” by the country’s auditor-general. Despite the finding, however, no investigations have ever been commissioned to get to the bottom of the Klang crisis.

In statements given to Fairplay, Transparency International Malaysia spoke of serious repercussions for Malaysia. TI-M president Tan Sri Ramon Navaratnam said: “The absence of investigation could raise serious concerns over the apparent lack of good governance. In Malaysia, we have a lively parliament with a significant opposition, and we hope the debate will continue and the electorate will follow the debate.” Navaratnam added that TI-M is prepared to help combat corruption alongside a newly commissioned Public Accounts Committee, which is to investigate Port Klang Free Zone.

Fairplay first reported on investigations into the free-zone issue in May, parallel to reports by Malaysia’s fiercely independent political portal Malaysiakini, among others. The effective closure of public debate will now push the discussion underground, which could prove costly for Badawi’s administration in an election year. He has already bailed out other failing corporations.

A letter to Malaysiakini last month slammed the transport ministry for denying any instance of fraud, irregularity or malpractice in Port Klang Free Zone. If allegations to the contrary are correct, the writer surmised, the only conclusion to be reached is that the port’s managers were simply incompetent and showed no organisational ability and hardly any knowledge about management.


  1. Captain Yusof, Many thanks for posting the article from "Fairplay"
    The shameful PKFZ scandal has now received worldwide publicity and thus notoriety, fantastically bad advertising which certainly will scare many potential investors away.
    The word in the corridors of honest investors and businessmen and women will be:-
    "Don't touch Malaysia with a 12' bargepole"

  2. Dear Captain Yusof,
    I am with Captain Karim in thanking you for the posting.

    Pak Lah and the rest of ruling party has forgotten the old saying that "Bangkai Gajah Tak Boleh ditutup dgn nyiru" loose tranlation,stench fr carcass of an elephant is just uncoverable.
    The rest of Malaysian could have live happily with the stench except for the few esp the bloggers

    Just cant wait for the people to complain to EU regarding the corrupt practice of Malaysian leaders and company in EU in collaberating a scheme to plunder the third world country wealth.They should start at how a company can pay RM500 million to ink a submarine deal.

    Thank You Capt.


  3. Reading this, I can't help but wonder, how long more do they want to keep quiet.

    As a Malaysian, I do want to hear their side of the story.

    Just a thought. Selamat berpuasa Captain.

  4. keep going Capt Yusof. This KPA scandal is no longer news in the mainstream paper. The taiko who is behind this scandal is back to work with a smile after a short hiatus. Now, his venerable ministry has just created another money leeching scheme known as E-Kesihatan. The SUN paper (dont be surprise its not the STAR) alludes a net cash generation of RM0.5 billion for the 15 year monopoly purely for coordination work to the promoters. That works out to RM33 million a year. At the end of the day, the consumers like you and me will end up paying for this. You wonder, to whom he works for and to whom he enriches.

  5. The E-Kesihatan is again a Chan Kong Choy sponsored project. The motives are clear; give a concession to a company and make a cut from there. Who pays the rich minister? The poor lorry drivers. So while he has kept silent on PKFZ the Minister of Transport CKC has come up another one.If PKFZ has not been exposed through the work of this good captain, he will certainly get away with this. What puzzles me is that the first objection of this scheme came from the Director General of Health.Someone from the Govt knows that this scam must be stop.
    Anyway we all can complain until the cows come home but CKC is now again overseas on Govt expense.

  6. Ahhh! So the Auditor-General did reportedly say the PKFZ project was 'financially insolvent' in 2003.

    And the current AAB administration 'allowed' this project to continue for another 4 years to suck up more funds, leading to the recent 'bail-out'.

    Need I say more on what can happen elsewhere e.g. IDR, NCER if the present political malaise is allowed to remain entrenched.

  7. I will fart in the Transport Ministers face before I sent him into my chambers. After that he will need to go for another medical overhaul in Melbourne.

  8. Captain,
    The speaker of the malaysian Parliament singlehandedly objected to issue brought up by Mr Lim Kit Siang in parliament. The speaker has made the greatest sin of his life by denying Malaysians any justice on the perpetrators of this scam in PKFZ. May he rot in hell for this sin.


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