Port Klang Authority to pay 2010 dues of RM772 million to Kuala Dimensi ?

Posted on June 27, 2010

0


Grapevine news these two days is that the Port Klang Authority  board of directors will meet next Tuesday to make a decision of paying RM772 million due to Kuala Dimensi Sdn Bhd (KDSB). I supposed the  PKA board is under political pressure to pay up ??
On 7 Jun, the newly appointed Transport Minister Datuk Seri Kong Cho Ha had said  “I think (we have) enough of the investigation, enough of all the study. All had been done on this issue so I don’t think there is any need for further re-look into it,” .  He added he would take time to study the issue to understand all about the scandal.
So now the million dollar question is : Will the  new Transport Minister support PKA to withhold the next payment of RM772 million next month to KDSB ?
This is necessary as PKA had filed two civil suits against KDSB last September for overcharging for and making false claims up to RM83 million for two development works. PKA is still in process of studying other claims against KDSB.
In December 2009, the Attorney-General Tan Sri Gani Patail had loudly declared that “more” and “bigger fishes” would be prosecuted for the RM12.5 billion PKFZ scandal, apart from the four executives arrested and charged in court. He had said in the presence of the chief of MACC Datuk Abu Kassim and the Inspector-General of Police Tan Sri Musa Hassan that the prosecution of four executives were “just the tip of the iceberg” and more people will face charges. Till now, we have yet to see any new developments of the AG’s claims.
My opinion : PKA should NOT pay until the investigations are complete and the relevant culprits are charged and prosecuted. Datuk Kong must now prove his critics wrong that with the ” demise” of his ex-president Ong Tee Keat as Transport Minister , the PKA scandal will be swept under the carpet. He’d already make the first mistake in declaring no further investigations into the scandal.
Till today, I still feel the new MCA President, Dr Chua Soi Lek had made a ” mistake” to dismiss Ong Tee Keat as Transport Minister. His decision is obviously politically motivated and as I am not so “politically minded” to understand it, I give him the benefit of the doubt.
Feedback from most local blogs is PKA will pay. What could be the possible reasons if such a decision is made ?
– Unofficially : Corrupt politicians in MCA and UMNO  who are exerting pressure on  the government to pay ? Whether he like it or not, Najib still has to “listen and respect ” his grassroot political partners.
–  Officially : The Treasury need the PKA’s board to consider both local and foreign investor confidence in the Malaysian private debt securities market. The argument here will be the four letters of support issued by former Transport Ministers Ling Liong Sik and Chan Kong Choy to KDSB. With these letters, KDSB had issue bonds to finance the PKFZ project. These four letters were implicitly a form of government guarantee for the bonds issued by KDSB. If PKA board refuse to pay, it’d severely affect Malaysia’s credit rating.
Both ex Transport Ministers had gone scot-free despite calls from the opposition that further investigations be conducted on them. The opposition must be naive to think that the government will listen to such call. I am sure the Ministers issue of guarantee would not have been granted without blessing and approval from the echelon top guys. MCA did not even conduct an internal enquiry on the ex Ministers with possible dismissal for breaching the trusts placed on them.
Last year when the news of the PKFZ scandal broke out, the RM660 million ( due for 2009 )  was withheld supposedly pending a full review by a task force established by Transport Ministry. However the PKA board finally paid on instructions from the Treasury and taking into consideration appeals from bondholder trustees. So it’s probable we will see the same reasoning for payment.
Furthermore,  our PM Najib had told an investor briefing in New York last November that the government would honor all PKFZ obligations up to US$1bil.
Transparency International Malaysia president Paul Low, appointed by former Transport Minister Ong Tee Keat to investigate and resurrect the PKFZ, warned that should PKA make the payment, it might not be able to get its money back if it won the suit. He had suggested that an escrow account agreed to by both sides be set up to hold the funds before the court decides on the outcome of the litigation.
I’d say this is still the best solution to this “Catch-22” situation.