Debt-ridden Port Klang Authority has been rescued by the government, with the transport ministry saying that they would give them a soft loan to cover their massive debt.

Port Klang, whose officials may be investigated for corruption, has spent RM4.6 billion since construction began in 2004, and local press have reported that the authority is riddled with mismanagement.

After meetings between Transport Minister Chan Kong Choy and Prime Minister Abdullah Ahmad Badawi late yesterday, the government agreed to the loan for the Port Klang Free Zone (PKFZ), a transport ministry spokesman said.

"Port Klang is our main port and we have much big plans for it. We cannot continue to let debt problems persist as it holds back all the plans to enhance this venture," the spokesman told AFP .

The 1,000-acre PKFZ shipping area opened in western Malaysia last year, and costs have risen swiftly.

"With the high overall cost of the PKFZ in mind, the government has agreed to give the soft loan and details are being worked out on the repayment scheme. It will be a scheme that will help them to get back on their feet again."

Worrying situation

The decision is likely to worry opposition leaders and corruption watchdogs, who have urged the government not to bail the port authority out without a thorough investigation into any corruption.

Opposition politician Lim Kit Siang gave notice to Parliament that he would move an urgent motion to debate the matter on Monday.

"Everything must come out in the open," said Lim.

"The Transport Ministry is responsible to all Malaysians for losing public funds, and that money is no chicken feed. Someone has to answer and the government must react to it."

The government's powerful Public Accounts Committee said earlier this week that they would look into any financial mismanagement by the port, and insisted today that a full-scale investigation would still go ahead.

"We must continue despite the latest developments. These are public funds and we need to know if they have been used properly," said Shahrir Samad, chairperson of the committee.

"It is up to government when to allow the police and the Anti-Corruption Agency to take the matter even further," he added.

In confident mood

Meanwhile, Port Klang Authority remained positive, insisting it would raise occupancy rate for the PKFZ to 80 percent in five years. So far, the zone has only filled 12 percent of its capacity.

"We are capable of repaying every single cent of the loan," Port Klang's business development manager Chia Kon Leong said.

In a statement issued late yesterday, the Transport Ministry said that Port Klang's debts were racked up during construction.