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Tuesday, June 29, 2010

'Helpless public pays for govt follies... yet again'


DAP MP Tony Pua has expressed disappointment over another case of the public having to pay for the government's follies.

He was responding to Deputy Minister of Transport Abdul Rahim Bakri's comments in the Dewan Rakyat today pertaining to Kuala Dimensi Sdn Bhd (KDSB).

After the winding up speech on the 10th Malaysia Plan, DAP supremo Lim Kit Siang said the Port Klang Authority (PKA) should not pay anything on behalf of KDSB.

“Given that there’s a dispute between PKA and KDSB, and now, the Inland Revenue Board (IRB) is also claiming money (from PKA), should PKA pay anything on behalf of KDSB?” he asked.

Abdul Rahim, however, said that PKA is “ultimately committed to the bondholders” and refused to comment further on the matter.

Speaking to reporters later, Pua said: “KDSB bondholders are notably upset with the development as there is a likelihood that they may not be paid for the loans extended to KDSB.”

“But based on the deputy minister’s statement today and previous action taken by the Finance Ministry, I am certain they will again insist that PKA make full payments to fulfill the ‘guarantee’ of the bonds provided by virtue of letters signed by then minister of transport Chan Kong Choy,” he added.

PKA which was due to pay the next installment amounting to RM772 million in 2010 to various bondholders on behalf of KDSB was forced to make a U-turn on the decision when it was discovered that KDSB has outstanding taxes due amounting to RM 328.4 million.

PKA is obliged to pay the taxes owed by KDSB to the IRB under the income tax laws.

Under such conditions, PKA accordingly informed the various KDSB bondholders of its intention to withhold two payments amounting to RM350 million for the purposes of settling the outstanding tax.

Last year, PKA was instructed by the Finance Ministry to make an installment payment of RM660 million to KDSB despite the former suing KDSB for fraudulent and excess claims worth up to RM1.6 billion.

In the first place, Pua said, PKA should not have paid KDSB on the basis that they are disputing the claims of work being done on the Port Klang Free Zone (PKFZ) project.

“The issue here is PKA was forced by the ministry to pay despite suing KDSB. As such, they had to fork out the money due to KDSB’s controversial ‘white-elephant project’ PKFZ which may cost the government up to RM12.5 billion,” he added.

Ministry must decide wisely

Pua urged the ministry to “decide wisely” on its next course of action.

“Are they going to let the perpetrators of PKFZ get away scot free with taxpayers money? My only question is why are they trying to defend the perpertrators when they have clearly failed to deliver as required?” he asked.

As an alternative, Pua suggested that the government stop all payments to the bondholders until matters are resolved between the parties involved.

“Why should we guarantee them if work is not done? In a case like this where something happens, the bondholders have to bear certain amount of responsibility.

“The bondholders should take the action of suing KDSB as PKA themselves have already taken that route. PKA only paid the necessary funds last year because it was forced by the ministry,” he added.

courtesy of FMT

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