Screenshots

We are quite aware that the NameWee Negaraku-ku issue can be made an effective tactic to distract us from an unprecedented host of grave issues affecting this country, aren't we? Let's put away the shades that wool your eyes.

There's more development to the Screenshots entry dated August 20 on the (RM4.6 billion PKFZ (Port Klang Free Zone) debacle.

August 20, Malaysiakini revealed that the PKFZ fiasco has a negative impact on Abdullah Badawi's mega project in southern Johor, the Iskandar Development Region (IDR).

The fiasco has forced the authorities to double their efforts to secure foreign investments from Dubai in the IDR because among those the authorities hope to inject RM382 billion into the 'southern corridor' come from the same business community as the Dubai-based Jebel Ali Free Zone (Jafza).

As you are aware, Jafza -- which had been appointed to manage and market PKFZ -- pulled out of a 15-year contract with its owner Port Klang Authority (PKA) last month.

Meanwhile in theSun today, the award-winning team of R. Nadeswaran and Terence Fernandez continued their "Dodgy Deal" expose by revealing that the government has to bail out the Port Klang Free Zone (PKFZ) because the Transport Ministry had given undertakings it was not authorised to do so.

The ministry issued "letters of support" which were used by the turnkey contractor -- Kuala Dimensi Sdn Bhd (KDSB), which is linked to beneficiaries comprising Umno politicians (see chart below) -- to raise bonds and get an AAA rating from the Malaysia Rating Corporation Bhd.

SOURCE: Malaysiakini, August 20, 2007

Ministry sources argue that they merely "supported" the applications but bankers contacted by theSun said that in effect, they were letters of guarantee which only the Treasury can issue.

This also means that the letters from the ministry had committed the government to ensure that at all times, the Port Klang Authority (PKA) will fulfil all its financial obligations to KDSB.

The scenario was that PKA started having problems in attracting investors and could not meet its yearly payments to KDSB. For the bankers, the issue was simple and clear. Since it was an undertaking by a ministry binding on the government, there was no option left but for the Treasury -- which is entrusted unto the Finance Minister to manage taxpayers' money -- to issue fresh letters and make the guarantees retrospective.

Or else, the government will be put in an embarrassing situation when the PKA is sent into receivership.

Abdullah 'uneasy'

While PKFZ and transport officials have maintained a silence over the matter, Prime Minister Abdullah Ahmad Badawi has reportedly “expressed unease” over the dispute between PKA and Jafza, Malaysiakini reported.

Meanwhile, Leslie Lopez wrote another front-page report in Straits Times Singapore today, headlined: "Port Klang's free trade zone woes loom large".

Leslie made a number of serious allegations in this latest report among which it was the first time that Jebel Ali Free Zone (Jafza) executive chairman Sultan Ahmed Sulayem and Jafza CEO Salma Ali Saif Hareb have been mentioned as having had communications, in March and November 2006 respectively, with the Malaysian Transport Minister about the Port Klang Free Zone project.

Apparently, the Transport Minister did not respond to these communications, a fact that was first revealed by theSun's award-winning team of journalists on August 13.

Leslie also wrote in his report: "When an audit indicated that financial transactions could open the company to potential charges of tax evasion in Malaysia, Jafza worried that its reputation would be damaged".

Tax evasion? R Nadeswaran and Terrence Fernandes said exactly the same thing last week.

UPDATES: Associated Press has filed a related story: Malaysia grapples with financial scandal. It was picked up by BusinessWeek.