The construction cost of the Port Klang Free Zone (PKFZ) went up from RM400 million to more than RM1 billion after the Port Klang Authority (PKA) and the project developer Kuala Dimensi Sdn Bhd signed an additional agreement on March 27, 2004.

Second prosecution witness Fazeilah Surkisah Mohammad, the legal adviser to PKA, told the Sessions Court here that based on the additional agreement, development of the PKFZ would be done in one phase only instead of two phases as stated in the original agreement signed between the two sides on Feb 27, 2003.

She said this when questioned by lead prosecutor Dzulkifli Ahmad, who is also head of the Forfeiture of Property Unit in the Attorney-General's Chambers, on the additional agreement that resulted in alterations to the original development plan of the project covering 400 hectares in Pulau Indah.

Former Kuala Dimensi project manager Law Jenn Dong, 53, architect Bernard Tan Seng Swee, 50, from BTA Architect, and Kuala Dimensi chief operating officer Stephen Abok, 53, are in the dock for allegedly cheating OSK Trustees in the PKFZ project.

    

She said the first phase covering 160 hectares of the 400 hectares was to comprise eight components - a high-tech office, transhipment facilities, light industry factories, medium industry factories, godowns, residential buildings, community facilities and infrastructure.

Asked whether the cost of each of the components was stated in the first agreement, she said they were not detailed.

On the additional agreement on March 27, 2004, Fazeilah said it was on the advice of a consultant that the whole project should be developed at one time instead of in two phases.

Costs explained

The PKFZ was to have been divided into eight precincts where Precincts 1, 2, 4, 6, 7 and 8 were marked as industrial lots while Precinct 3 was for snack food factories and Precinct 5 for an office complex and a customs yard, she said.

Fazeilah said in the additional agreement, PKA agreed to appoint Kuala Dimensi for the design, construction and finishing of the project and to finance the project estimated at RM1 billion.

Fazeilah said the overall cost, including interest at 7.5 percent per annum  and other charges, would have been RM1.3 billion.

She further told the court that PKA and Kuala Dimensi entered into an agreement for additional development works on Nov 30, 2005.

The additional works were improvement of the junction to PKFZ at a cost of RM285.38 million, construction of power infrastructure at RM135 million and a budget hotel at RM90 million.

Fazeilah said the total cost of the additional works was RM510.38 million and this did not include interest at five per cent per annum imposed on PKA.

She testified that on April 26, 2006, Kuala Domensi and PKA signed a supplementary agreement for additional works.

Additional works

Among these were concrete trenching at a cost of RM140.2 million, infrastructure for 33 kV electricity in Precinct 2 and Precinct 8 at RM80 million, civil and infrastructure works at RM30 million, construction of a direct access route from PKFZ to East Port at RM28.1 million, and a road linking PKFZ to West Port at RM57.5 million.

The overall cost for the additional works was RM335.8 million, she said.

Cross-examined by counsel Tan Hock Chuan, representing Law, on whether all the conditions of the sale or purchase of the land between PKA aad Kuala Dimensi were approved by the government, Fazeilah said a copy of the report was sent to the Federal Treasury and Transport Ministry.

Asked whether the consultant who advised that the PKFZ project be developed in one phase only, she said she was not sure because the consultant was closer with the PKA engineering division.

The trial which continues tomorrow is being heard before judge Asmadi Husin. Abok is represented by Hisham Teh Poh Teik and Bernard Tan by

V Sithambaram.

- Bernama