Thesun 2009-05-29 Page01 Pkfz Over To Macc

 Member of Audit Bureau of Circulations (Malaysia)

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No. 4769 PP 2644/12/2009 (023092)

Friday May 29, 2009

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Economy to contract but likely to be better in H2, says Najib PUTRAJAYA: The economy will contract to between -4.0% and -5.0% this year, Prime Minister Datuk Seri Najib Abdul Razak said yesterday. However, it is expected to do better in the second half of the year. In March, the government had forecast Malaysia’s growth to be between -1.0% and 1.0%. Currently, there are early signs that the economic stimulus packages are beginning to have positive effects, Najib told a media briefing in his office. This has further been supported by higher commodity and stock market prices as well as rising investor confidence. “With this, it is hoped that the economy will recover at the end of the year,” he said. “Although the fourth quarter is likely to be positive, the overall growth for the year is still negative because the first quarter is negative, and (because of) the expected negative growth in the second quarter and slight negative growth in third quarter.” Najib, who is also the finance minister, said Malaysia is already in technical recession. “Our recovery depends on the world recovery. We have to see what happens in the United States and Europe. If they recover, we will be on track for growth,” he said. He said the sector which had pulled the first quarter growth down was exports, which contracted by 25% as external demand plummeted more than expected. Private investment was also down by 26%. “The worldwide foreign direct investment (FDI) has shrunk. FDI

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Jaya supermarket collapses A section of the old Jaya supermarket, a landmark in Section 14, Petaling Jaya, which is being demolished, collapsed yesterday evening, killing two workers and trapping five others. Two others were pulled out of the rubble alive. See Page 8

PKFZ: Over to MACC

by Giam Say Khoon and Tim Leonard [email protected]

ETALING JAYA: Transport Minister Datuk Seri Ong Tee Keat has ordered the Port Klang Authority (PKA) to lodge a report with the Malaysian Anti-Corruption Commission (MACC) today to initiate a probe based on the Port Klang Free Zone audit report, which was made public yesterday. The 45-page report by PricewaterhouseCoopers (PwC) highlighted 20 issues for the PKA to deal with, in connection with the project at Pulau Indah, Selangor, where land and development costs started off at RM1.957 billion in 2002 and steadily grew to

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RM3.5 billion because of project variations. Interests on a controversial Finance Ministry soft loan of RM4.632 billion to help finance the project will push the bill to RM7.453 billion, and up to RM12.453 billion if payments are further staggered, the report said. “The strategic intent of the project was to transform Port Klang into a national load centre and regional transshipment hub,” it said. “However, significant project costs, weak governance and weak project management have severely undermined the viability of the project. “It is imperative that PKA takes immediate action to restructure the Finance Ministry’s soft loan of RM4.632 billion to avoid a potential default in 2012. The government would need to make

a concerted effort to turn the PKFZ into a viable venture.”

Other highlights in the report:

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the powers and authority of PKA are not well defined and the cabinet was not alerted in a timely manner on PKA’s inability to pay for the project out of its own funds. the PKA board did not exercise oversight and adequate governance over the implementation of the project in relation to key agreements, variation orders, appointment of key project consultants and acceptance of land without the contr actor completing infrastructure works.

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