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It's no case for Official Secret Act. Or else, how could documents simultaneously drop on the laps of Leslie Lopez and R. Nadeswaran, Malaysian journalists working for newspapers on both sides of the straits?

Lopez says he has seen the relevant government documents, and talked to bankers and industry executives, before he writes this in today's Singapore Straits Times:

A financial crisis at the Port Klang Authority could turn out to be the biggest scandal yet for the nearly four-year administration of Prime Minister Abdullah Badawi, the Singapore paper says.

1 ) The damage is at least RM5 billion. The private company tasked to develop Port Klang Free Zone (PKFZ), Kuala Dimensi, has long links to several senior officials Abdullah's ruling Umno party and was originally awarded the development project at a cost of RM1.08 billion. But that figure has ballooned to RM4.6 billion because of hefty cost overruns.

2 ) Discrepancy in approval procedure. The Cabinet meeting early last month, which was chaired by Deputy Prime Minister Najib Abdul Razak, was told that the huge jump in the cost of the project to RM4.6 billion from RM1.08 billion did not have the proper approval of relevant government agencies. Typically, any jump of more than RM100 million in the cost of a project has to be approved by the Ministry of Finance, which is headed by none other than PM Abdullah.

3 ) Bail out is approved. To avoid any fallout to the country's banking system, Abdullah's government has decided to bail out the project, and senior government officials say the Cabinet agreed last month to bail out the project.

4 ) Initial bailout of RM4.6 billion. Among other things, the government has decided to extend a financial lifeline of RM4.6 billion to help the Port Klang Authority meet its financial obligations on borrowings from the country's financial institutions. This rescue will include a RM510 million payment this year to Malaysian banks, and the remainder in separate instalments between next year and 2010.

5 ) Hugh debts during current Abdullah's time. The project was mooted during Dr Mahathir's administration, but government officials acknowledged that the Port Klang Authority's huge debts were incurred during the Abdullah administration. Moreover, the huge overruns could have been the result of serious regulatory and procedural lapses by the Port Klang Authority and Transport Ministry officials, as documents reviewed by The Straits Times show.

6 ) Inflated land cost and monopoly status. The land from the project, a 400ha free-trade zone, belonged to Kuala Dimensi, whose current chairman is Umno treasurer Azim Zabidi. The company acquired the land in the 1990s for RM96 million, or roughly RM3 per sq ft. While acquisition of the land under the country's Land Acquisition Act meant that the property would have been valued at around RM10 per sq ft., Lopez says government documents indicate that the land was purchased from Kuala Dimensi in 2002 on a commercial basis, for RM1 billion, or roughly RM25 per sq ft.

7 ) Backing from Transport Ministry, which has no jurisdiction. The authority also decided to award the now cash-flushed Kuala Dimensi sole rights to develop the free-trade zone. To fund the development, Kuala Dimensi raised funds through the issue of bonds that received the backing of Malaysia's Transport Ministry, now headed by MCA deputy chief, Chan Kong Choy. However, Lopez says guarantees on loans or bonds can be issued only by the Ministry of Finance.

8 ) Potentially a white elephant. Despite the bailout, the entire project could become a white elephant following the pulling out of Dubai-based Jebel Ali Free Zone (Jafza) as principal partner last month. Senior government officials tracking developments of the project say that Jafza executives had raised their concerns as early as March last year; while a top Jafza executive, senior vice-president for international operations Chuck Heath, had written to Transport Minister Chan Kong Choy saying that, without 'radical surgery', the project was doomed to failure.

THE WORMS BEING UNCANNED. While the pandora box is being opened bit by bit, watch out for this woman named OC Phang who has seen the coming in and going out of too many Port Klang Authority chairmen in so many years.

Meanwhile, theSun's R. Nadeswaran and Terence Fernandez today put Phang in the spotlight and paraphrased PKFZ as a Disaster Zone.

On record, Dubai-based Jafza had pulled out of the management of PKFZ for "strategic purposes". However, the separation was acrimonious, theSun reports, also citing documents it obtained like Lopez did.

With the expose by theSun, it has now come to light that Jafza's Heath had sent a letter to Transport Minister Chan Kong Choy, dated May 29 last year, that red tape had hampered the progress of the free trade zone as among others, that "there has been a total lack of government planning ... which has seen the most fundamental issues being considered and resolved only after the event rather than before." Quote:

He (Jafza's Heath) added that the lack of transparency from the start had also hampered the development of the free trade zone, with Jafza not having access to relevant details of the main development contract.

"The Board of directors structure has not provided any fundamental support and in fact has drawn us into political issues that have a negative impact on the development," Heath wrote.

"The Malaysian political and economic landscape has too many vested interests seeking involvement and control in this project. ..." he said, taking a swipe at the Finance Ministry for placing obstacles in the form of obsolete regulations as well as the non-issuance of licences and financial incentives.

"Unfortunately," Heath added, "without radical surgery in cutting out the above obstacles, we feel this project is doomed to failure."

theSun cites a host of documents, which include strongly-worded e-mails, revealing that Jafza bailed out because of bureaucracy, interference by politicians and others with vested interests, and deliberate incorrect minuting of meetings.

"The dossier, which borders on deceit and lies, points the cause of the collapse of the deal between Jafza and PKFZ at the government machinery and one woman, O.C. Phang," theSun says.

Noel Gulliver, Jafza's man acting as PKFZ general manager, was escorted from his office to the Immigration Department for "being in gainful employment without a work permit" - although the agreement between Jafza and Port Klang Authority (PKA) indicates that it is PKA's responsibility to obtain a permit for Gulliver.

theSun quotes an e-mail from Gulliver to Jafza International senior vice-president (international operations) Chuck Heath last October 30, stating that Phang had given him (Gulliver) three months to "toe the line", ordering Gulliver to report to PKFZ and not Jafza.

Attempts of tax evasion, Malaysian side

Significantly, there are reports of attempts at tax evasion by the Malaysian negotiators in the entire PKFZ debacle.

theSun has put on record by saying that it was Ernst & Young which indicated that the details of the payment schemes involved tax evasion.

The said E&Y report was originally submitted by Gulf Managing Partner of Clifford Chance, to Jafza HQ in Dubai.

Let me tell you this: OC Phang's position as the Chairman of Port Klang Free Zone (PKFZ) was appointed by the Minister of Transport.

Phang has been the general manager of the Port Klang Authority since 1997, during the time retired MCA chief Ling Liong Sik was the Minister of Transport.

You have to juxtapose what she told Oriental Daily News on August 5 about PKFZ against the latest findings for the Malaysian truth.

Paled compared to BMF Scandal of 1980s

Fellow blogger, Ancient Mariner Capt. Yusof, was cringing in pain as early as July 25: "Many of my ex colleagues and I, former employees of the KPA have served for many years at low salaries so that the port can accumulate healthy reserves of about RM500 milion about ten years ago. We are indeed most distressed to learn that the port is now hugely in debt to the tune of almost RM 5 billion!"

Capt. Yusof was in cringing pain again, August 10 and August 13. "And trying to 'fix' the Arabs for not being 'cooperative' is dirty poker indeed," he said.

Just to give you an illustration of the numbers involved. Someone says he overinflated sum of RM4.63 billion used in the development of PKFZ is actually more than the costs of developing both Pelabuhan Tanjung. Pelepas (PTP) and West Port combined!

The BMF Scandal of the 1980s involving the Bumiputra Finance, choked up a mere sum of RM2.4 billion and it rocked the financial system and warranted a Royal Commission of Inquiry and White Paper for a cdecent burial.

COLOUR-BLIND. All these had come to pass, thanks to an accidental probe by (Colour-Blind) Ronnie Liu in June.