The corruption trial of former transport minister Ling Liong Sik was told that the cabinet under the administration of former prime minister Dr Mahathir Mohamad had postponed the development of Port Klang Free Zone (PKFZ) on Oct 2, 2002, a month before the sales and purchase agreement was signed on Nov 12.

NONE The decision to defer the buying process was because the Finance Ministry “objected” to the terms and conditions in purchasing the 999.5 acres plot in Puala Indah from Kuala Dimensi Sdn Bhd (KDSB), said the Transport Ministry’s then deputy secretary-general for planning, Abdul Rahman Mohd Noor ( right ).

“The Finance Ministry had written to the AG’s (Attorney-General’s) Chambers... (and) the AG had given his opinion. 

“The cabinet, then, made the decision to postpone the land buying process following objections from the Finance Ministry,” he said under examination-in-chief by Deputy Public Prosecutor (DPP) Tun Majid Tun Hamzah.

Abdul Rahman, 61, said this was despite the cabinet’s intial green light to Port Klang Authority (PKA) to buy the plot, the finance ministry still wanted to acquired the land under the Land Acquisition Act 1960 and wanted the terms renegotiated.

Earlier on, Abdul Rahman said that Ling had written to Mahathir on April 3 explaining why the land must be bought over by PKA and not acquired.

The witness, reading out the contents of the letter, said Ling explained that an acquisition is not possible as the Selangor state government refused to an acquisition under Section 3(1)(a) of the Land Acquisition Act, and instead suggested other provision which hindered the process as well.

Last week, Abdul Rahman said that the Treasury advised the government to acquire the 999.5 acre plot instead of buying it over, as it cost less.

Ling appealed to Mahathir to ‘speed up’ the process

Abdul Rahman said Ling appealed to Mahathir to reconsider the direct purchase plot from KDSB, with the terms renegotiated and a valuations conducted by the Valuation and Property Services Department (JPPH).

Ling wanted the land purchase hastened as PKA, at the time, was rushing to construct the mega hub in a strategic alliance with Dubai’s Jebel Ali Free Zone Authority (JAFZA).

Although Port Klang was on JABZA’s most strategic location, it was also considering to take its 3,000 companies to two other major ports - Laem Chabang in Thailand or Indonesia’s Batam Island.

“Mahathir agreed to the renegotiations,” he said, referring to a reply dated April 8. However, he pointed out that the Finance Ministry had later raised objections resulting in the project being shelved.

azlan On Oct 22, Abdul Rahman said he had sent a memo on the behalf of the Transport Ministry and Ling to the cabinet explaining on several “inaccuracies in facts” presented by the Finance Ministry to the AG’s Chambers pertaining to land buying process for the mega project.   

The hearing today was adjourned abruptly to tomorrow before Judge Ahmadi Asnawi, as the prosecution’s documents were incomplete.

Ling faces an amended principal charge of deceiving the government by concealing an additional interest rate of 7.5 percent per annum to the cabinet for the purchase of 999.5 acres of land in Pulau Indah for the trans shipment hub project.

He was said to have committed the offence at the Prime Minister's Office in Putrajaya between Sept 25 and Nov 6, 2002.

The interest rate was based on a rate of RM25 per sq ft, which worked out to RM1,088,456,000.

Ling is accused of having committed deception with the knowledge it could cause wrongful losses to the government and despite being bound by a fiduciary duty to protect the government.

Ling also faces two optional charges:

  • Cheating the government by not revealing to the cabinet the facts relating to the interest rate;
  • Cheating the cabinet into believing that the facts relating to the purchase of the land at the rate of RM25 psf and interest rate at 7.5 percent were approved and agreed to by the JPPH, an agency under the Finance Ministry, when he knew there was no such consent.