Opposition legislator Dzulkefly Ahmad today lamented that the government might have to bail out another multi-million ringgit government-linked venture.

Malaysian International Tuna Port Sdn Bhd (MITP) has landed in the courts for defaulting on payments on RM240 million of bonds it issued last year.

The bonds are backed by a government letter of support and the Kuala Selangor PAS MP said this could turn out to be another financial fiasco.

The port in Batu Maung, Penang was to be developed into a fully integrated fisheries port specialising in tuna by 2008 and the Agriculture and Agro-Based Industries Ministry which was then under deputy premier Muhyiddin Yassin had issued a letter of support.

y4c nep forum 180107 dzulkefly ahmad It was given through its statutory body the Fisheries Development Authority of Malaysia (LKIM), and stated that LKIM would ensure MITP is in a position to meet its obligations to repay the bond.

MITP is 60 percent owned by a private company, Blindforce Sdn Bhd, and 40 percent by LKIM.

"The ministry had issued a letter of support to the OSK Trustees Berhad on Sept 15, 2008," said Dzulkefly ( left ) in Parliament.

"LKIM issued a ‘Letter of Undertaking' which states in Clause 24 of the concession agreement will be enforced when there is an event of default occurs in the MITP.

"On Jan 6 OSK Trustees declared an ‘event of default' on MITP. OSK Trustees is demanding for RM208.62 million, including interest.

"Therefore, the government has to bear RM83.45 million, which is 40 percent of MITP's equity," he said.

Are there more 'promises of undertaking' ?

Irked, he demanded to know how many more projects in the recent 2011 Budget that the government has promised to undertake in the Public-Private Partnerships Initiative under the Economic Transformation Programme (ETP).

"All this is just ‘off balance-sheet' budgeting that has led to the government to deal with a yawning fiscal deficit," he blasted.

Similarly, he pointed out at leakages highlighted in the newly-released 2009 Auditor-General's report.

Among others, he hit out at the government over the audit report's finding that the stimulus package injected into the 2008 Budget was wasted on "chandeliers, home-theatre systems and sofa sets".