Sell off the 'black hole' PKFZ

DAP information chief Tony Pua today urged the government to sell off the troubled Port Klang Free Zone (PKFZ) to stop the further bleeding of public coffers.

Pua said based on Port Klang Authority (PKA) figures, PKFZ is facing a cash deficit of RM3.6 billion and the government would have to fork out RM8.6 billion by 2042 in order to turnaround the project.

Likening the project to a 'black hole', Pua said the government has already committed to loaning PKFZ a RM4.6 billion 'soft loan' in 2007 and has to consider if it is still viable to pursue the project.

"Do I pump in RM8.6 billion or do I call it a day? Do I put good money to chase after bad money?" he asked.

Pua was formerly the economic advisor to DAP secretary-general Lim Guan Eng before being elected Petaling Jaya MP.

He was among the seven-member DAP delegation, led by party veteran Lim Kit Siang, who studied the three-inch thick appendix to the PricewaterhouseCooper (PwC) audit report on PKFZ.

There are only 15 copies of the appendix available and can only be viewed at the PKA headquarters in Port Klang from today until June 10.

Speaking to reporters later, Lim echoed Pua stating that the government should let PKFZ go, even if it means PKA going bankrupt.

PKFZ unlikely to make a profit

PKA is the managing authority of PKFZ and had commissioned PwC to audit PKFZ following claims that there were many financial irregularities involved in the project.

After much delays, the audit report was released yesterday revealing that the cost of the project had ballooned from RM1.9 billion in 2001 to RM7.5 billion, including interest cost, currently.

The report estimated that the total project outlay may cost up to RM12 billion by 2051 because PKA is unable to service the loan from 2012 to 2041, thereby incurring extra interest cost.

In addition to this, Pua said the government must also consider the commercial viability of the project, especially when the audit report hinted a gloomy prospect for PKFZ.

"It was hinted in the PWC report that PKFZ is facing weak markets, demand and government bureaucracy. The way I look at it, the likelihood of the project taking off successfully is very remote," he said.

In addition, PKFZ is also bound to face problems because the Malaysian International Shipping Corporation (MISC) is pulling out of the long-haul container trade while another major shipping line CMA CGM is shifting its Southeast Asian hub to Johor, said Pua.

"With all these big players moving out, who is PKFZ going to serve in the future?" he asked.

According to the audit report, the current occupancy at PKFZ is at 14 percent.