PKA says KDSB bondholders paid to avoid breach of contract
TMI: April 17, 2012
Datuk Seri Ong Tee Keat giving a speech during the launch of Lee Hwa Beng’s book. – Picture by Choo Choy May
Former Transport Minister Datuk Seri Ong Tee Keat revealed today the government has paid out RM3.039 billion despite outstanding civil suits against the turnkey developers for the project which has ballooned from an initial RM1.1 billion to a possible RM12.5 billion.
“PKA has proceeded with the bond payments to honour the agreement, so as not to further implicate PKA for breach of contract in light of the ongoing cases,” the regulators for Malaysia’s largest port said in a statement sent to The Malaysian Insider.
Ong, who was removed from the Cabinet after being ousted as MCA president in 2010, had said the government should not pay the scheduled amounts, where another RM733.37 million is due in June, until the legal disputes have been settled.
“The fact that you paid him after you discover the alleged fraud shows that you indeed grant consent to it,” the Pandan MP said at the launch of former PKA chairman Datuk Lee Hwa Beng’s book, PKFZ: A Nation's Trust Betrayed, this morning.
He also stood by his claim that the bond has never been guaranteed by the government despite two previous transport ministers, Tun Dr Ling Liong Sik and Tan Sri Chan Kong Choy, who are both being tried for cheating the government, having signed letters of support for the bonds.
But the PKA insisted that it decided to pay the bondholders “in good faith based on national interest and in particular not to affect the confidence in the Malaysian bond market.”
The PKA, which Lee left in March 2011, yesterday denied the DAP’s claims that it dropped legal action against KDSB for alleged fraud, unconscionable conduct and overcharging in favour of resolving the matter through arbitration.
“There is no decision to drop any of them and these suits will continue in court,” a PKA spokeswoman said in response to The Malaysian Insider’s request for confirmation from its general manager David Padman.
The project, initially tagged estimated at RM1.1 billion after it was mooted by then Transport Minister Dr Ling in 1997, more than quadrupled to RM4.6 billion by 2007.
A position review by top accounting firm PwC revealed in 2009 that the total cost including interest from debt repayments could reach RM12.5 billion.
Since December 2009, six individuals have been charged in court including ex-MCA president Dr Ling and his successor as transport minister, former MCA deputy chief Chan, who are both accused of lying to the Cabinet.
But Lee, the MCA’s former Subang Jaya assemblyman, told The Malaysian Insider in a recent interview this was “just the tip of the iceberg.”
He said more would be revealed through the “money trail” if a corruption charge was ever brought to court or if there was a change in government as a new transport minister and PKA chief would not be obstructed by vested interest.
The PKA added today it is “mindful of all implications and are carrying out steps to resolve these issues in the best way possible by being transparent in our actions in the most ethical and professional manner.”
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