Transport Minister Chan Kong Choy and his subordinates once again evaded fielding questions on the Port Klang Free Zone (PKFZ) controversy.

The minister was conspicuously absent from a press conference called Tranport Ministry at the PKFZ headquarters regarding the issue today.

Other ministry officials also did a disappearing act, leaving PKFZ officials to distribute a five-page statement from the ministry.

Unfortunately, the statement does little more than state some facts already known about the fiasco, fudge other facts, while completely ignoring a host of other important questions that have been raised with regards to the development project.

The statement confirmed that the government has approved a 'soft loan' to Port Klang Authority (PKA), the state-owned agency responsible for the mega-project. "Details of the borrowing are being finalised," it said.

According to the statement, the 'facts' are:

  • The land on which PKFZ now stands was bought at RM1.088 billion which, paid over 15 years with 7.5 percent interest, amounts to RM1.807 billion. This clarifies earlier discrepancies on the actual sum paid - put simply, the land price was RM1.1 billion while PKA which bought the land had to pay in total RM1.8 billion over 15 years.

  • PKFZ was initially to be developed in two phases - the first, to develop 500 acres with a price tag of RM400 million.

    • However, following the advice of the Dubai-based Jebel Ali Free Zone Authority (Jafza), PKFZ's owner Port Klang Authority agreed to develop the land in one go at a cost of RM1.845 billion, said the statement, which appeared to suggest that Jafza should shoulder part of the blame.

    This included additional developments such as the building of a business-class hotel with 135 rooms.

    "Hence, the total cost of PKFZ after including the land purchase and development costs, interest cost of 7.5 percent, professional fees of 10 percent and a variation order limited to 20 percent (if used) is estimated at RM4.632 billion," read the statement.

    The ministry also said PKFZ is a national project to help increase the volume of cargo at Port Klang "to serve as a catalyst for national economic growth and to create employment opportunities and ancillary support services and business activities.

    "Hence, because the total PKFZ costs are high, the government has agreed to approve a soft loan to PKA. The details of that loan are under discussion," it added.

    'PKFZ-Jafza split'

    On the split between PKFZ and Jafza which was engaged in October 2003 to "manage and administer" PKFZ, the ministry said Jafza's decision to end the contract was based on "a change of policy (on the part) of Jafza in order that it manages free zones only in places that it can control operations as an equity-holder."

    On the future of PKFZ, the ministry said as of August, the zone attracted 30 investors and estimated investments of RM725 million.

    "Efforts are being made to attract foreign investors with the cooperation of Mida (Malaysian Industrial Development Authority), Matrade (Malaysia External Trade and Development), and international marketing firms in Holland, India and China to spearhead marketing efforts in Europe, China and India while making PKFZ the centre of regional distribution and allocation in line with the government's vision.

    "PKA is confident of reaching fast growth rates and 80 percent occupancy rate in five years."

    Most of the journalists at the press conference were disappointed that the ministry was not represented by any official who could shed light on the many unanswered questions regarding the issue.

    An official from the ministry's maritime division - who was introduced as its representative - as well as an aide of Chan disappeared before the statement was distributed to the press.

    Prior to this, the duo joined the 20 journalists on a tour of the premises.

    PKFZ officers, meanwhile, refused to comment on any of the other issues and questions surrounding the controversy.

    A number of the officials, including PKFZ's new general manager in charge of business development Chia Kon Leong, said they can only answer questions on the business aspects and plans for the zone.

    Revamped business model

    In his presentation, Chia said 77 acres out of the total 640 acres of open land had been taken up, 16 of the 512 Light Industrial Units have tenants, while 4,628 square feet of the total 500,000 office space are occupied.

    PKFZ also currently employs 800 people on its staff.

    He also said PKFZ had come up with a "revamped business model" to achieve the ambitious aim of attaining 80 percent occupancy in five years, while an "aggressive marketing strategy over the next 12 to 24 months" aims at pulling in small-medium industries and enterprises.

    The marketing strategy would be modified from the approach of Jafza by taking into consideration more local and regional factors.

    At the same time, Chia said PKFZ will target 70 percent of the investments from foreign investors as opposed to 30 percent local investments.

    In response to questions, he said PKFZ currently operates with a working capital of RM12 to RM16 million, but hopes to be self-sustaining by 2010 on RM24 million.

    PKFZ also forecasts a revenue by that time of RM40 million yearly and the presence in the zone of 650-700 companies, he added.

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