Datuk Kong Cho Ha – Paying KDSB is a wrong move

Posted on July 29, 2010

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28 Jun : Transport Minister Datuk Seri Kong Cho Ha overrule the PKA’s board and said had instructed PKA to pay 222.58 million to Freezone Capital Bhd (FZCB), despite the board’s ongoing suit against turnkey contractor KDSB. Datuk, you are using rakyat’s tax money which I am a contributor too. Your decison to pay stinks and is obviously to protect KDSB and its bond holders. You are not taking responsibility in taking care of us but to a minority group  ( government cronyies ??  ) which are obviously  politically linked to Barisan Nasional.

Datuk Kong , being the newly appointed Transport Minister,  you had led us down terribly. You had obviously  succumbed to political pressure and not thinking right. You have now sold your soul to your political masters. Politically,  you will be dead come 2013.

DAP’s Tony Pua had rightly said : “Kong has chosen to instruct PKA to make the payments which are ‘due’ despite the ongoing dispute and litigation, to ensure that one of the biggest beneficiaries of BN patronage projects remains an ongoing concern. “What is perhaps most disappointing is that this decision comes at a time when the government has preached prudence in expenditure, called for the rakyat to accept substantially reduced subsidies, and yet, when it comes to one of their own like Syabas or KDSB, the BN government will not hesitate to extend hundreds of millions to assist them.”

What is your interpretation of this report by The Sun on 28 Jul ? I am sure you are aware of this but you have chosen to ignore it. Disappointing !

The Sun ran a report claiming that PKFZ turnkey contractor Kuala Dimensi Sdn Bhd (KDSB) had issued three letters of undertaking allegedly offering to cover any shortfall in repayments by the Port Klang Authority (PKA) towards bonds issued to raise funds for the project. The daily quoted a few lines out of one of the letters which said: ‘We hereby confirm that we undertake to cover the shortfall in the event of any shortfall in the amount payable by Port Klang Authority in the year..vis-a-vis the bond repayment amount after taking into account balances in the escrow account’.
It also claimed two KDSB directors – Idris Mat Jani and Omar Abdul Latip – signed the letters on separate dates between September 2004 and September
2006, as guarantees of repayment for three out of the four special purpose vehicles (SPV) set up by KDSB to issue the bonds.

Based on these signed letters by the said KDSB directors, PKA has NO obligation to pay any money as the letters would have absolved the port authority of the responsibility over any outstanding repayments.  With the ongoing suit by PKA against KDSB for over charging and non-completion of work , it is contradictory for the government to insist on paying the company before the matter is decided by the court.

My frustrations and disappointments expressed earlier in this blog :

Jun 27 : Port Klang Authority to pay 2010 dues of RM772 million to KDSB
Jun 29 : Port Klang Authority will pay KDSB RM 772 milllion
Jun 30 : KDSB did not pay tax for last 13 years
Jul 4 : PKA will pay KDSB the RM772 million and IRB taxes too !