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| PKFZ: 5 lots sold to third parties before offered to govt |
| Written by Chan Kok Leong | |||
| Thursday, 05 November 2009 23:21 | |||
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This, according to Attorney-General Tan Sri Abdul Gani Patail, was one of the reasons why the government could not have bought the land directly. "Kuala Dimensi Sdn Bhd (KDSB) could not execute the land transfer to the government free of any encumbrances," Gani told the Public Accounts Committee (PAC) in August. Gani was explaining to PAC members why the land should not be bought by the government on a "willing buyer, willing seller" basis. When asked by Tony Pua (Petaling Jaya Utara-DAP) if it meant "double sale", Gani just nodded his head. "Before the government bought the land, KDSB had sold five lots to other people." Sixty acres were sold on Feb 2, 1995 for RM10.80 per sq ft (psf), while another 10 acres were sold to Group Developers Sdn Bhd for RM14.37 million on May 22, 1995. Excellent Pack Sdn Bhd and Excellent Forum Sdn Bhd bought 10 acres each at RM13 psf and RM65 psf on Oct 11, 1995 and Jan 21, 1998, respectively. "On Sept 15, 1995 Resource Entrepreneur Sdn Bhd had also bought land at RM10.80 psf. But I am not very sure of the acreage," said Gani, according to minutes of the PAC report which was released in parliament on Wednesday. At the time the land was offered to the government, it had not been transferred yet, he added. "That is why there were caveats on the land," said Gani. The AG had earlier told PAC that the normal procedure for the government to obtain land was through acquisition via the Land Acquisition Act 1960. "By acquisition, the market price of the land will be determined by experts at market value rather than at the dream and fancy of the seller." The AG Chambers proposed that the land be obtained via the Land Acquisition Act 1960, which allows the government to acquire land for "public purpose". Gani explained that the Port Klang Authority (PKA) was also empowered by the Port Authority Act 1963 to obtain the land "for the purpose of discharging its functions". "But since the government decided to go by 'willing buyer, willing seller' basis, the question of acquisition did not arise," said Gani. He said that the government decided on this following the AG Chambers' advice. Gani also testified that it was improper for a lawyer to represent both parties as in the PKFZ case where Rashid Asari & Co acted for KDSB and PKA in the development agreement. The development agreement, according to Gani, had several weaknesses which "did not safeguard the interest of the government". "Among them were a lack of details on the work to be done, no proper plans detailing the work and deadlines or schedule of costs. The costs cited were only estimates. "There was also no clause to say that PKA reserved the right not to pay if it was unhappy with the work done. The agreement also did not provide for a performance bond by KDSB to PKA," he added. Gani said that the development agreement and the subsequent supplemental agreements had never been referred to his department as it was between KDSB and PKA and that PKA did not come under his scope of work. On the letters of support from the ministry of transport for PKFZ, Gani said that the last three letters represented guarantees by the government. "Although they probably are not strict guarantees in the context of the Financial Procedure Act, they represent the government's backing. "These letters were given AAA ratings by Malaysian Rating Corporation Bhd (MRCB) and the government's credibility is above everything else. Whatever it is, the letters amounted to an absolute guarantee, that is why the rating agency gave it three stars rating because they know we cannot back out."
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