Home 
Economics/Business Malaysia Malaysia's Growing Port Scandal
Economics/Business Malaysia Malaysia's Growing Port Scandal | Malaysia's Growing Port Scandal |
|
|
Tag it:
| Written by Our Correspondent | |
| Friday, 27 November 2009 | |
 The dogs bark, the caravan moves on
Malaysia's massive port scandal, which has received enormous publicity, implicating a wide swath of past and present officials at the very top of the national coalition government, is confronting Najib Tun Razak, the prime minister, with an unappetizing list of choices given his public rhetoric about cleaning out corruption in his party and government. The cost overruns in the disastrous attempt to turn the Port Klang seaport into a national multimodal transshipment involve top figures in the Malaysian Chinese Association, the second component of the ruling national coalition, as well as influential members of Najib's own party. As with a staggering number of industrialization projects dreamed up by former Prime Minister Mahathir Mohamad, the Port Klang free zone appears to have served as a kind of gigantic smorgasbord from which officials picked out whatever they wanted to enrich themselves. In September, police froze the bank accounts of Kuala Dimensi Sdn Bhd, the corporate entity with the contract to build the port, while they attempt to sort out what happened. "I believe they will nail a few people," said a Kuala Lumpur observer with ties to the United Malays National Organization. "The scandal is too big to ignore. But how severe their punishment will be remains to be seen. Some will certainly go to jail. Lots of Umno guys are behind it, but they're medium fry. The main culprits are the MCA guys plus Tiong." That is Tiong King Sing, an influential Sarawak lawmaker and chairman of the parliament's Backbencher's Club, who holds 70 percent of the shares in Kuala Dimensi. Although authorities may charge Tiong, sources say, he is likely to be the only one despite the complicity of a long list of MCA and UMNO figures. Tiong has denied any impropriety and one source said that "Tiong has hid his tracks very well." There is also the question of the involvement of the cabinet itself. According to June 22, 2007 documents classified under the country's Official Secrets Act as secret (Rahsia), which were obtained and translated by Asia Sentinel, and other documents, it appears that the government, through the reigns of Prime Ministers Mahathir Mohamad, Abdullah Ahmad Badawi and the current prime minister, Najib Razak, retroactively and illegally authorized payments and bonds that have driven the cost of the project from an original RM1.96 billion (US$577 million) in 1999 to a potential RM12.45 billion if the port defaults and is forced to pay interest on its debt, according to a report by PriceWaterhouseCoopers Advisory Services. Two transport ministers who previously headed the Malaysian Chinese Association, and three of the four Port Klang Authority chairmen went along with the cost overruns, much of which appear to have stemmed from out and out corruption. The current chairman Lee Hwa Beng, is an accountant and has supported attempts to bring the scandal into the open. In the classified memorandum, which can be found here, the cabinet agreed to "approve retrospectively costs related to the development of the PKFZ from RM1.088billion to RM4,632,732,000…and to give retrospective approval/validation of the government's guarantee in issuing bonds at the estimated value of RM4,632,632,000 including coupons by Kuala Dimensi. This support must be based on the issuing of several Letters of Support by the Transport Minister, where these letters would become an implicit government guarantee that is legal." The letters of support referred to in the cabinet document were issued by the two previous Transport Ministers, Ling Liong Sik and Chan Kong Choy, that allegedly were issued without authorization from the Treasury Ministry. Now, according to the cabinet document, "The government needs to carry the financial burden of RM4,632,732,000.00 in the form of soft loan to PKB… the government's contingent liability will increase to RM4,632,732,000.00 if PKB cannot repay the bonds which have been issued. This amount does not include Medium term Notes at RM85mil and RM75mil respectively which are yet to be issued." The port's directors say it is now likely to default on billions of ringgit in loans, with the possibility, according to the PriceWaterhouseCoopers report, that accumulated interest could drive the cost up by more than a factor of six. The scandal has caused havoc inside the MCA, with the current transport minister, Ong Tee Keat insisting that all the reports related to the affair be released to the public. Those efforts caused his enemies to overthrow him as MCA president. The party is now considering intra-party elections to install another leader. The story started when, according to the PriceWaterhouseCoopers report, Kuala Dimensi sold the land to the Port Klang Authority for RM1.09 billion, or RM25 per square foot although by using Malaysia's Land Acquisition Act, it could have been purchased for RM10 per square foot. Kuala Dimensi acquired the land from the Pulau Lumut Development Cooperative for only RM3 per square foot. A flock of UMNO officials were involved in various roles including the party's permanent chairman, Onn Ismail, his son-in-law Faizal Abdullah, the former party treasurer Azim Zabidi and others. A Kuala Lumpur source called them "bit players who were there more for insurance and influence-peddling." Others named in the PWC report included Umno officials Abdul Rahman Palil, Abdul Rashad Asari, Omar Latip and Idris Mat Jani, who served in various capacities either with the development cooperative, the supposedly independent surveyor, the law firm advising Kuala Dimensi or as shareholders in allied companies. Kuala Dimensi, having acquired the land for the free trade zone, was appointed to develop it. That resulted in cost overruns mounting to the hundreds of millions of ringgit. According to The Sun, a Kuala Lumpur newspaper, the Dubai-based Jebel Ali Free Zone, originally appointed to manage the port, gave up and pulled out in 2007, allegedly because of interference from politicians and figures with vested interests, deliberate falsification of minutes, attempts at tax evasion by Malaysian negotiators and other issues. It appears that management was so substandard, according to a report by yet another committee, that the port didn't even have revenue or cost projections. If the government's past track record of investigation is any harbinger, it is questionable what will be done. In 2007, the Malaysia Anti-Corruption Commission was asked to investigate the plethora of illicit payments and kiting of land prices. The MACC declined to do so in 2007 according to Mohd Sidek Hassan, the chief secretary to the government. Under pressure from the magnitude of the controversy, the MACC is now investigating how the price of land for the acquisition of the project ballooned out of control and will probe financial records pertaining to payment claims and other issues such as conflicts of interest. It is a safe bet that none of those issues will involve how the Malaysian cabinet agreed to ratify the letters of guarantee issued by the Transport ministry despite the fact that only the Treasury Ministry can legally issue such letters, and how it authorized the backdating of billions of ringgit in bonds and other costs over the past several years. Some of the actions would appear almost laughable, if the cost weren't roughly RM500 for every one of Malaysia's 25.7 million people according to one report. On Nov. 4, according to local media, a Corporate Governance Ad Hoc Committee on the free zone project recommended the creation of an Ethics and Integrity Monitoring Committee and the appointment of independent non-executive members who would constitute one-third of the port's board of directors. A seminar on corporate governance and transparency will be scheduled. But this time, judging from the numbers of bloggers and independent commissions – and the phenomenal size of the scandal – something might actually be done, and somebody might go to jail.
Set as favorite
Bookmark
Email This
Comments
(12)
Untung
written by Mamakthir , December 07, 2009
Untung lah seems to be the battle-cry of the UMNO cronies and their barison Ali Baba thieves
Votes: -1
report abuse
vote down
vote up
Malaysia is blowing itself up
written by sang kanchil , December 01, 2009
PKFTZ, Pahang state corp scandal, Sarawak scandal. It makes endless reading. There is no end to the greed of UMNO and their cronies. There is no sense of nationalism - only personel greed. Now it appears that the Iskandar Project in JB is heading the same way. The CEO has resigned - the 2nd one in just a few months. Why? Because the project has been given a lot of money from overseas and the local MB is eyeing it - of course aided by his Chinese crook. The Malays avoid going to Chinese houses because it is not "halal". They won't drink the water from a Chinese house because it is not "halal". But when it comes to money - everything becomes "halal". Who cares if it is corruption. Money can wash away all the sins! Another weakness is women. Yes, show them a sexy woman and everything also can do!. Sex and money can make everything "halal". That's why Malays don't feel they have commited a sin when they are corrupt. The feel of money is stronger than their feelings for the teachings of their religion. I have lived for so long in this beautiful country and unfortunately I have to witness the rotting core of Malay morality. It is time to bring in the non Malays to restore Malaysia to it's previous grandeur.
Votes: +7
report abuse
vote down
vote up
Bad Karma
written by Mamakthir , December 01, 2009
Bad Karma for the racist pious but murderous and whoring cronies.
Votes: +0
report abuse
vote down
vote up
The Devil Made them Do it!
written by Abraham's son , November 29, 2009
Malaysian Muslims need not go to Mecca to "stone the devil". All they have to do is travel to Mahathirs house-stone him and then proceed to UMNO building,MCA and MIC...with Gerakan among others-there are so many devils in KL!
Votes: +4
Malaysia is a Joke country! No credibility-now they want to indirect tax the public via sales tax to pay off all these monies due as a result of CORRUPTION.We have to Cangratulate Mahathir-the Father of Malaysian Corruption, his side kick Badawi-the owner of the bankrupt Banana Leaf Resturant in Australai ( Cant run an eating shop-wants to run a country) and Najib-the Corrupter/alleged MURDERER!! Dont worry -right now the Special Branch is looking for people like me to use C-4 on.Boy this is scary business to speak the truth! report abuse
vote down
vote up
Let's not kid ourselves
written by Philip , November 29, 2009
No big fish will get fingered and jailed for this. Maybe only a few fall-guys of minor political clout.
Votes: +2
Justice for the People will be "served" Altantuya-style, with the henchmen being charged in court but with the prime movers and beneficiaries of this scandal going scot-free. The People deserve the government it gets, for continually voting in Umno & Co. over the past 12 elections. Malaysia will not survive another decade as it is now if they get voted in again in the next Elections. At this rate, its primary exports by 2030 will be housemaids and construction labourers. report abuse
vote down
vote up
Only In Malaysia -Crime Pays-Thanks to UMNO and its Crony-MCA!
written by Black Money , November 28, 2009
How much more can the Malaysian Taxpayer take-2nd class citizenship, corruption and outright bad governance.Malaysia fits the profile as a "Failing State". I can only see that fundemental Islamisation will rear its ugly head - as moer and more citizens of all religious backgrounds demand for accountability.
Votes: +7
With Mahathir Mohamed as Najib's advisor-there will be no accountability-the rot continues.Its been MONTHS since this scandal broke and yet the Malaysian Government has been sitting on it.WHY?? Because 70% of the money went to the RICH BUMIS-the selected few.Remember Tun Diam did the same.This trendcontinues to bankrupt Malaysia. I see a bleak future.Malaysians should revolt using democratic means-come foward-film your leaders and post it internationally, keeping spreading the word, name names internationally, when elections vote PAS-they are better than UMNO, support everything OPPOSITION, support Anwar Ibrahim, and bring this government down peacefully and democratically. Spare no effort-this must be done and bring all the corrupted politicians to justice-Lik Tan Koon Swan -Malaysian would like to see Mahathir and his cronies in Kajan Prison after a fair trial! report abuse
vote down
vote up
...
written by stupid , November 28, 2009
No need jail. Out Tiong and Chan Koon Choy on Tiong's plance and blow them up.
Votes: +0
 report abuse
vote down
vote up
change the government
written by Jay Jay , November 28, 2009
yeah, that's what we must do!
Votes: +4
report abuse
vote down
vote up
justice?
written by soul survivor , November 27, 2009
got to change the govt first if malaysians ever dream to bring in the big crooks!history keep repeating itself and umno/bn never learn this or rather to ignore it out of lust and greed (or plain stupid).the past proved that all the power-greed establishments fell apart once their misdeeds were to the maximum...and this is what umno/bn is presently going thru!umno/bn HOLES are toooooo LARGE that they keep digging it until they found they are trapped by their own digging!!!their souls are toooooo dark that polishing them are simply impossible.get back our dignity and CHANGE WE MUST!!!
Votes: +3
report abuse
vote down
vote up
GO to jail? What a joke!
written by JayCkat , November 27, 2009
Go to jail? Please don't delude yourself. Nobody will go to jail. The bailout of Renong cost the Malaysia taxpayers RM 30 billion. Compared to that PKFZ's RM12.5 billion is nothing.... just use some EPF or Petronas money to pick up the tab-lah. Malaysia is awash with money. Dumb malaysians will happily work to pay for this project
Votes: +22
report abuse
vote down
vote up
GO to jail? What a joke!
written by JayCkat , November 27, 2009
Go to jail? Please don't delude yourself. Nobody will go to jail. The bailout of Renong cost the Malaysia taxpayers RM 30 billion. Compared to that PKFZ's RM12.5 billion is nothing.... just use some EPF or Petronas money to pick up the tab-lah. Malaysia is awash with money. Dumb malaysians will happily work to pay for this project
Votes: +3
report abuse
vote down
vote up
|
Subscribe to this comment's feed
Show/Hide comments
Show/Hide comment form
The Risk of Travel in AsiaOur Correspondent A new report by International Risk says it's a jungle out there
Full Story |
| Other Articles |
Criticizing Malaysia's Kings Police hunt for bloggers and others who abuse the late Johor sultan's memory
Full Story |
| most read... |
Alice Poon
| Freedom of Expression Too Precious to Throw AwayThursday, 04 February 2010 | Alice Poon
In a free society, there will always be more than one single opinion. In a free society, it is accepted that everyone should have an equal right to express his/her opinion without fearing... Full Story |
| Previous posts: |
John Elliott: Riding the Elephant
| From vultures in Delhi, to coups in Pakistan, a journalist's un-edited take on current events |
Donate to Asia Sentinel
