An executive director with BDO Chartered Accountants told the Kuala Lumpur High Court that the RM25 per square foot (psf) price for the purchase of land for the Port Klang Free Zone (PKFZ) project would have included interest.

NONE Mok Chew Yin, the second defence witness in the trial of former transport minister Dr Ling Liong Sik (right) , said the price of land must otherwise arrive at the present or special value of RM21 psf set by the Valuation and Property Services Department (JPPH).

The RM21 psf was the present value (PV) in 2002 if the government had decided to pay the full amount in cash for acquiring the 1,000 acres (400 hectares) of land, Mok said.

However, he noted that the government had decided not to pay the full sum, but to defer payments over 10 years or 15 years.

With the deferred payment, Mok explained, the price of RM21 psf could not stand as it may not reflect that value in 10 or 15 years, after the full payment is made and adjusted.

“Based on our calculations... the land value was increased to RM25psf (for a 10-year repayment period) and RM25.82psf (for a 15-year period). This excludes interest of six percent per annum in deriving a cash price of PV of RM21psf,” he replied Yeoh Cho Kheong.

“If we use the calculation of RM25 psf, after a repayment period of 15 years, the PV price would work out to RM12.75psf. And the calculation for 10 years would result in the PV of RM14.50psf. Both values are lower than present or special value which was agreed upon at RM21psf.”

Ling, 69, is defending himself against a charge of cheating the cabinet between Sept 25 and Nov 6, 2002, when Dr Mahathir Mohamad was prime minister.

He was charged on July 29, 2010, under Section 418 of the Penal Code, which carries a penalty of up to seven years in prison, or a fine, or both, upon conviction.

He faces two alternative charges of cheating and intentionally omitting information in his report to the cabinet on the additional interest rate, which carries up to five years’ jail term or a fine, or both.

'Consistent with JPPH's valuation'

Meanwhile, in the afternoon session, Mok stated that the sale and purchase agreement stated the interest was at 7.5 percent and it is consistent with the JPPH’s valuation as stated in the two letters issued by the department in 2000.

“Based on the illustration, by not charging interests it would not derive the PV price of RM21 which has been agreed upon,” he said.

Throughout the proceeding, Ling had said that he had let the JPPH to do the calculation and his ministry would not intervene as it (his ministry) does not have the expertise to do so as it lies with that department and the Finance Ministry.

Hearing continues before Justice Ahmadi Asnawi on Thursday.