Wednesday, September 2, 2009

Management Of PKFZ Project Very Weak, Says PAC

The Public Accounts Committee (PAC) said it found the management of the Port Klang Free Zone (PKFZ) project to be very weak and many management practices for a project of this size were absent.

Its chairman, Datuk Seri Azmi Khalid, said PAC came to this conclusion after former PKFZ chairman, who was also the former chief executive officer of Port Klang Authority (PKA), Datin Paduka O.C.Phang, testified.

"It was obvious, the management of the project was very weak and many of the practices in the management of huge projects were not there.

"That's why the cost escalated drastically," he added.

The most obvious weakness, he said, was the absence of the projection of income and expenditure for the project.

"If there is no projection, it is like walking in the dark, and this is a project which rely on cash flow projection so that repayments can be made to the banks.

"So, if there is no projection of income and expenditure or cash flow, we will not know where the mistakes are," he added.

PKFZ, a transshipment hub built on a 405-hectare site in Port Klang, was embroiled in a controversy after it was revealed that the development cost had shot up from RM2.5 billion to RM 4.6 billion.

PKA had bought the land from Kuala Dimensi Sdn Bhd at RM25 per sq ft and later appointed the company to develop it.

Azmi said government representatives in the PKFZ board of directors were also found not to be representing the government as they were supposed to because a few of those who attended the board of directors meeting did so only to represent the secretary-general of their respective ministries.

"This means the government representatives also do not care and leave it to the management, and the management has weaknesses which will be mentioned in PAC's report," he added.

Azmi said although Phang cooperated with PAC during the hearing from 10am until 2.30pm, there were still some matters which had to be looked into deeply.

Asked who gave instructions to Phang in managing the PKFZ project, Azmi said they comprised the relevant authorities, like the Transport Ministry, Finance Ministry and inputs from certain individuals, including ministers.

He said Phang was also the general manager of the PKFZ project.

Azmi said PAC would release a report on the PKFZ scandal in October.

Source: Bernama

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