The mudslinging between senior politicians in the ruling coalition over the fiasco at the Port Klang Free Zone (PKFZ) is also giving Malaysians front-row seats to the strife besetting the Barisan Nasional (BN) government since it lost its two-thirds parliamentary majority in last year's general election.
“This whole thing is giving the opposition the ammunition to attack the government,” said a minister from Umno.
Like several other ruling-party politicians, this minister said the scandal — which has forced the government to bail out the project and stand by borrowings estimated to be in excess of RM10 billion — presents a major dilemma for Prime Minister Datuk Seri Najib Razak.
Unless the public spat is settled quickly and parties behind the huge losses at the scandal-ridden port project are held responsible for criminal negligence, Datuk Seri Najib's bid to revive his BN government's appeal with Malaysians is likely to face a major setback, government politicians said.
While financial bailouts, such as the rescues of scandal-tainted state-owned Bank Bumiputra and tottering steelmaker Perwaja Terengganu, were common during the 22-year rule of former premier Mahathir Mohamad, analysts say the scandal at the port comes at a time when the Malaysian public is growing intolerant of such abuse.
“I think the government needs to show that there will be no cover-up because the amounts here are huge. In these tough economic times, public anger will only be on the rise,” said the Umno minister, who asked not to be named.
It will not be easy, however, to investigate the PKFZ thoroughly, argue political analysts, because key protagonists in the row are major powerbrokers in the BN government.
Datuk Seri Tiong King Sing, a senior politician Sarawak, is the majority shareholder of Kuala Dimensi, the private company that built the port project after selling the land for the construction site to the government for a huge profit.
Shortly after Kuala Dimensi was singled out in a special audit report for billing discrepancies of close to RM1 billion, Tiong hit back with allegations that his company had provided the use of a luxury jet and donated RM10 million in political funding to Transport Minister Ong Tee Keat, who has been spearheading the probe into the financial shenanigans at PKFZ.
Datuk Seri Ong, who is president of the Malaysian Chinese Association (MCA), the ruling coalition's second- most senior party, has sued Tiong and insists that he did nothing wrong. But the allegations have nevertheless hurt his standing in the MCA, where he does not enjoy widespread support and is fighting a potential challenge from his deputy Chua Soi Lek.
In an apparent bid to distance the party from Ong's troubles, MCA treasurer Tee Hock Seng has said the party did not receive any funds from Tiong. He added that MCA “party leaders are not encouraged to accept donations in their personal capacity and all donations to the party must be made directly”.
The free-trade zone project began as a joint venture between the Port Klang Authority and the promoters of the Jebel Ali Free Trade Zone in 1999 to attract foreign investments to the port.
The land from the project belonged to Kuala Dimensi, which acquired the property in the 1990s for RM96 million, or roughly RM3 per sq ft.
The land was subsequently sold to the Port Klang Authority in 2002 on a commercial basis, for RM1 billion, or roughly RM25 per sq ft, government documents show.
The port authority later awarded Kuala Dimensi sole rights to develop the free-trade zone, which has been hit by cost overruns and mismanagement. — The Straits Times
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