Chan Kong Choy did a Houdini Act to Jafza


Back to Kong Choy and the PKFZ debacle .

Chan Kong Choy did not reply to Jafza on the PKFZ difficulties . He was running away from its problems , in other words whether PKFZ survived or not , he couldn't care less .

In August 2007 the original cost of the project had ballooned from RM2 billion to RM4.6 billion because of, among others, overvalued land costs.

Despite all the investment poured into the PKFZ, what it has to show are rows of unoccupied buildings, an incomplete four-star hotel and kilometers of pothole ridden roads.

Documents obtained revealed that the falling out was because of red tape, political meddling, inaccurate minutes and attempted tax evasions.

Jafza executive chairman Sultan Ahmed Sulayem and its senior vice-president (international operations), Chuck Heath, had written to Transport Minister Datuk Seri Chan Kong Choy on March 11 and May 29 last year, respectively, complaining about the difficulties working with the PKA, but did not receive any reply.
In the letter, Heath alleged that the PKA had also overruled many areas of its responsibilities.

He also complained that transparency was non existent and the Malaysian political and economic landscape has too many vested interests seeking involvement and control in this project.

Later former Prime Minister Datuk Seri Abdullah Ahmad Badawi said he had to get a report from Chan before commenting on the matter.

At the post Cabinet press conference , Chan said the issue was discussed in the Cabinet meeting and a statement on this will be issued soon.

One week later the Transport Ministry issued this statement on Port Klang Free Zone

The Port Klang Free Zone (PKFZ) management is confident of reaching 80% occupancy by 2012.
General manager (business development) Chia Kon Leong said this would mean attracting 650 to 700 companies to invest in the 404ha PKFZ.

In 2010, PKFZ is expecting a total revenue of RM40mil and it would be a self-sustaining company by then,” he said.

The Transport Ministry, in a statement, gave an assurance that PKFZ was an important national project and that the Government has agreed to provide a soft loan to PKA. The details are still being discussed.

PKFZ has received Government support as it will increase the cargo volume at Port Klang – the national maritime gateway – generate economic growth, create job opportunities and encourage supporting services, it said.

The statement added that the Government respected Jafza International’s change of policy and its decision to pull out of the agreement to manage PKFZ.
“Jafza withdrawal was due to its new policy to hold equity in the free zones it manages,” said the statement.

No hanky panky in PKFZ, says Chan. No hanky panky ?

Later in the week Transport Minister Datuk Seri Chan Kong Choy came out to deny allegations that the Port Klang Free Zone (PKFZ) project is a failure.

In a written answer to Lim Kit Siang (DAP-Ipoh Timur) in the Dewan Rakyat (Parliament), he said despite the PKFZ having only begun operations last Nov 1, it had attracted 30 investors with investments totaling about RM725 million and offering 809 jobs.

There is no hanky panky involved in the implementation of PKFZ. This project was approved by the government, he said.

Lim had asked why the problems and cost overrun involving billions of ringgit were not monitored despite warnings from the Attorney-General’s Chambers and whether there is any bailout of the RM4.6 billion spent on the project.

Chan said the project was divided into two portions – land acquisition and infrastructure development.

He said the land acquisition cost was RM1.088 billion and with the deferred payment period of 15 years at an interest rate of 7.5%, the cost would amount to RM1.807 billion.

This cost also involves initial work carried out, such as land reclamation, drainage, roads, bridges and other utility infrastructures,” he said
He also mentioned that the development of infrastructure facility involved a cost of RM1.845 billion covering construction of office buildings, light industrial units and other interior infrastructure construction.

Thus, the overall cost of the PKFZ, taking into account the land acquisition and cost of infrastructure development, interest cost of 7.5%, deferred payment, 10% professional fee and work changes limited to 20%, the cost amounted to RM4.632 billion,” he said.