COMMENT | PKFZ: Time has not come for celebrations

COMMENT | The celebrations started last week and are still continuing. Chest-thumping, back-slapping and congratulatory messages. Short of a full-page colour advertisement, the revelries have not stopped. Letters of praise and hope are pouring in. Articles and commentaries with photographs have graced the pages of the party newsletter and social media.

But behind all the merriment, self-praise and confidence lies a series of dark secrets, some of which have been laid bare. The ghosts of the past appear at the end of June annually (when payments are due), to remind the ignominy, humiliation and embarrassment that the government had to face.

Ignoring the large amounts of negativity which are already in public domain, the pundits refuse to recognise and accept that a large financial hole has to be filled in the case of the Port Klang Free Zone (PKFZ).

To recap, the 1,000-acre PKFZ in Pulau Indah boasts an industrial zone comprising prepared industrial sites or open land, light industrial units for factories and warehouses and office space. PKFZ’s strategic intent was to be a free zone that catered for both industrial and commercial businesses. Nevertheless, its costs ballooned from an estimated RM1.8 billion in 2002 to RM12.6 billion in 2009.

Until 1Malaysia Development Bhd (1MDB) made the headlines in 2015, the PKFZ case remained the biggest financial scandal in Malaysia. At least in the case of the former, a few have been prosecuted and part of the missing money has been recovered. What is there for PKFZ to show? Plenty of glad tidings but not a sen to show.

The PKFZ was conceived in 2003 and constructed along the lines of the Jebel Ali Free Zone, where companies can manufacture their products for export. The adjacent Westport was supposed to be the direct gateway, sans the red tape and paperwork. In short, products are manufactured for export and the port next door ships the products to the markets around the globe.

The PKFZ website states the obvious: “PKFZ has been designed to promote entrepôt trade and manufacturing industries involved in producing goods primarily for export. Gazetted as a Free Zone, PKFZ incorporates both commercial and manufacturing activities that are further supported by quality and value-added services. PKFZ offers consolidated facilities where factories and logistics firms can be located in the same zone so as to allow for easier coordination and smoother supply chain management.”

Now, the obvious question to ask is: Is it a free zone or just another industrial estate, where anyone and everyone can buy or rent the premises and operate without any conditions?

This is important because, if it was meant to operate as just another industrial zone, there would have been no necessity to put in the place infrastructure running into billions of ringgit! All that has to be done is to clear and level the land, build the roads and sell empty plots where factories and warehouses can be built.

PKFZ is now nothing but a huge warehousing facility, like the scores of such amenities dotted around the Klang Valley. Is this what PKFZ was meant to be? It was never meant to store empty container boxes or cargo from the two nearby terminals – it was meant to be a manufacturing hub with own supporting services to attract foreign companies to build their factories and export their products.

Celebrating profits of RM42 million last year on investments, which have snow-balled to RM12 billion, is not something you gloat or write about. Even if profits soar, the previous transport minister, Anthony Loke (above), envisaged that it would take 29 years for the loan to be settled.

The government bailed out the project, settling bonds taken by the turnkey contractor and the Port Klang Authority (PKA), which owns PKFZ is now using almost all its profits – about RM200 million annually in repaying the loan.

Former PKA chairperson Lee Hwa Beng was forthright when he argued that even if PKA was able to rent out its RM1 billion properties, including land, buildings and hotels upon completion, the rental collected would not be able to cover the cost of construction.

So, at the current rate, if PKFZ is going to operate for 29 years to just service and settle outstanding loans, what’s the celebration about? A syiok sendiri feeling or get that “feel good” sensation?

What started out with the purchase of just over 1,000 acres of land from a colony of fisherfolk at RM3 per sq ft, ended up with the government buying at nine times the cost – RM27. Why? “Oh, the price included the infrastructure” was the official reply, but why was then over RM1 billion spent on roads and bridges?

The events leading to the snowballing of the cost have been chronicled in various publications and it would not be necessary to repeat them. At worst, it was a classic case of cost over-runs, double billing and above all, the lack of integrity.

The events that followed exposed the shenanigans of those involved, including some directors, management, lawyers and even some politicians who had milked the system for personal gain.

So, enough of this festivity, fetes, commemoration and honouring until the last sen is paid.

R NADESWARAN has been following developments on the PKFZ since 2007 and has authored a book on the scandal: PKFZ: Some Untold Stories. Comments: citizen.nades22@gmail.com

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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