In her testimony to the Public Accouts Committee (PAC), Phang said that the directive to implement the project in a single phase came in writing from the former PM and transport minister who were in turn advised by Jebel Ali Free Zone International (Jafzi).

She said all the ministries at the federal level knew all along that the Cabinet had given the approval for the 1,000 acres to be acquired on a willing buyer-willing seller basis from Kuala Dimensi Sdn Bhd (KDSB) and there were financial implications.

“The government knew all the way about it. MoT is aware, MoF [Ministry of Finance] is aware, central agency… I’m quite annoyed …. But this land acquisition levelled at me, I think I have the right to be annoyed,” she had testified.

The Treasury had directed that the land be compulsorily acquired as it would be cheaper. But PKA acquired the land from KDSB at RM25 per sq ft, which drew criticism as, had it been acquired via the Land Acquisition Act, the price would have been less than half.

According to Phang, the acquisition of the land on a willing buyer-willing seller basis was done following a letter to PKA from the then transport minister Tun Dr Ling Liong Sik. Tun Dr Mahathir Mohamad was the prime minister at the time.

She said that the plan initially was to develop the land in two stages, with the first phase involving 500 acres. PKA’s role was to jump-start the project by developing the first 500 acres and the rest was to be done later.

On March 3, 2004, the PM and transport minister then (Abdullah and Chan) directed PKA to develop the entire 1,000 acres in a single phase on the advice of Jafzi, she testified.

“Jafzi, represented by Chuck Heath, had briefed the minister on 10 good reasons why it should be developed in a single phase. This is very clear in my mind because suddenly we have to do amendment, we have to set up legal document and development agreement. Therefore the scope widened… there is financial implication.”

Phang said that she had reminded Chan at every opportunity during post-Cabinet meetings that PKA was only supposed to jump-start the project but she was merely told to implement it.

“I don’t want to be caught for something that I do not know but they say ‘you just implement’. The word is implement, Fine,  I do as ‘Menurut Perintah’ ”.

To a question on whether there were doubts or reservations on the part of PKA on the cash flow implications of the project being implemented in a single phase as recommended by Jafzi, Phang said that she had alerted the minister after post-Cabinet meetings and MoT  officers many times.

“But every time the assurance will always be ‘we will take it’,”  Phang testified. She also said that the PKA had written to the MoT that the project be put into the 9th Malaysia Plan to ease its funding requirement.

She also spoke of a plan by Dr Ling (Liong Sik) to establish a National Port Authority which would be able to tap on billions to help finance the PKFZ project. But the plan did not take off as it was not agreed upon by other port operators.

On the appointment of quantity surveyor Perunding BE Sdn Bhd, Phang said that PKA recommended the firm to be part of the consortium of quantity surveyors because it was a bumiputera company and had the experience. She said that both Perunding BE and legal firm Rashid Asari & Co had approached the PKA to be appointed to the job. Both these firms had also done work for KDSB, which raised the issue of conflicts of interest.

This article appeared in The Edge Financial Daily, Nov 5, 2009.