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| OC Phang doesn't know cash flow projection |
| Written by Sharon Tan | |||
| Thursday, 03 September 2009 00:37 | |||
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That was the conclusion of the Public Accounts Committee (PAC) following testimony by former PKA general manager Datin Paduka OC Phang at parliament yesterday. That being the case and in the absence of best practices, PAC perhaps implied that the PKA board's oversight of PKFZ was left to the whims and fancies of a poor management and the contractors. Following 4½ hours grilling Phang, the committee's chairman Datuk Seri Azmi Khalid put the blame of PKFZ's failure squarely on poor and weak management. Pressed if it was really the case that PKA had never made any cash flow or other projections, Azmi said: "No, according to her (Phang). In fact, she didn't even know what we mean by cash flow projection."  Met after the inquiry, Phang refused to answer reporters' questions. She tried to hurry off but had to stop now and then as she was blocked by the horde of newsmen."Please let me walk. Please let me go," Phang insisted, without answering any questions. At one point, when The Edge Financial Daily asked if she came to the hearing with any lawyer, Phang stopped in her tracks and stared at the reporter for a couple of seconds, before moving on. She was grilled for more than four hours from 10am to 2.30pm, the longest by far, by PAC members, with intermittent heated exchanges. Meanwhile, Azmi told reporters that the best practices that should be adopted for any big project, were conspicously missing at PKFZ. He said the project was completed fast but its financial management and other aspects were weak. "That is why we found there is a drastic cost escalation; that is a problem and is now a big issue for the government," he said, adding that the team Phang led was weak and had poor management skills. On what the practices were that ought to have been put in place, Azmi said anyone who knew business and project management would have projections of income and expenditure. "We have to have budget and also cash flow projection. You make projections of the best estimates you can make of your cash expenditure and income. From there, we monitor the project. "If there is no budget and cash flow projection, it is as though we are walking in the dark. This is a project that presumes income flow to pay back to quarters that came up with the money. We have commitments to pay the banks. We have commitments to pay the loans and we expect the income from there to be paid. "If there is no projection of income and cash flow, we don't know where the mistake is. This is a glaring weakness that we found. Even if you want to start a small business, you must have this," said Azmi, adding that the management did not have these in place and made no mention of it. He said if one were to compress an eight-year project into two years, all aspects of the project must be monitored closely with proper management systems which were missing in the case of PKFZ. He reiterated that the representatives from the government did not represent the government as they ought to. "They only represent the secretary-general and not the board of directors (of PKA). This means these representatives were also not concerned and just left it to the management which has certain weaknesses," said Azmi, adding that Phang was cooperative in her testimony. Phang was also asked on decisions she had made unilaterally without the board's participation. However, Azmi said he would leave that matter to the PKA special task force. Asked if Phang indicated she had received instructions from anyone, Azmi said: "She indicated. Those were the proper authorities. The transport ministry, finance ministry and inputs from various people, including ministers. It is quite normal. But managing a project is more than that." On whether Phang knew if the project was in trouble since she was overseeing it most of the time, the PAC chairman said: "She said she was the non-executive chairman of PKFZ." Asked if Phang should bear the responsibility, Azmi said: "She admits that as the general manager, she is responsible. Whether it is right or wrong is another story." PAC will hear the testimony of former PKA chairmen Tan Sri Dr Ting Chew Peh and Datuk Yap Pian Hon today after which the committee hopes to wrap up the inquiry.
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