As the Transport Ministry cannot be relied on to clarify matters relating to the Port Klang Free Zone (PKFZ) fiasco, the truth can only be extracted through either the Public Accounts Committee (PAC) or the Parliamentary Select Committee on Integrity, said a graft watchdog.

President of Transparency International's Malaysian chapter Ramon Navaratnam said this is because the statement issued yesterday by the ministry has done little to assuage public doubts and concerns surrounding the PKFZ development project.

"All the facts need to be thoroughly brought out and this can only be ascertained with a hearing by the PAC or the Parliamentary Select Committee on Integrity," said Navaratnam.

"In the end, it is the taxpayers who will bear the brunt of wastage and neglect of public funds. If their concerns are not meant openly by the government, they will express their concerns through the ballot box," he warned.

Navaratnam was commenting on the explanation of the ministry regarding the controversy that has arisen over PKFZ and its owner Port Klang Authority (PKA).

The project's cost ballooned from a projected RM2.3 billion when the initial land and development agreements were inked in 2003-2004 to the current RM4.6 billion.

In its statement yesterday, the ministry said the high price tag is because the RM1.807 billion land purchase and RM1.845 billion development cost are compounded by interest costs of 7.5 percent, professional fees of 10 percent and a variation order limited to 20 percent (if used).

Fact not mentioned

This means the interest, professional fees, and variation order by themselves would amount to RM980 million.

While acknowledging that RM400 million was the agreed-upon cost for developing the first phase of the two-stage, the ministry blamed the Dubai-based Jebel Ali Free Zone Authority (Jafza) for advising PKA to develop the land in one go at a cost of RM1.845 billion.

The ministry neglected to mention the fact - contained in the Auditor-General's 2004 report on PKA - that the development cost had earlier shot up from RM400 million to RM1.3 billion following a 2004 "supplementary agreement" signed between PKA and the developer Kuala Dimensi Sdn Bhd.

It also failed to mention that - according to the Auditor-General's 2006 report - the development cost had further increased by RM1.21 billion to RM2.51 billion consisting of "additional development works, professional fees and interest."

Among the other questions not addressed by the ministry pertain to the government's impending bailout of the project, allegations of political interference and conflict of interests in PKFZ, as well as the questionable land purchase.

Commenting on this, Navaratnam said it is incumbent on the government to protect its reputation and integrity by instituting a public inquiry or investigation into the matter.

"The government will not move much until they feel that they have to - but when will they feel they have to?" he asked.

PAC chairperson Shahrir Abdul Samad said the committee will initiate its inquiry into the affair soon.