PORT KLANG (July 12): Port Klang's regulatory body, Port Klang Authority (PKA), is currently in talks with the Ministry of Finance (MoF) to restructure the repayment of the RM3.8 billion soft loan it took from the federal government, said Transport Minister Anthony Loke.

PKA had took up the loan from MoF back in 2013 – payable over 19 years beginning 2018 – to develop the Port Klang Free Zone (PKFZ). This was restructured in 2017 to be paid over 29 years.

Under the deal, the statutory body is scheduled to make an annual payment of principal plus interest of RM222 million; the obligation for the first two quarters of 2018 has already been paid. The repayment is at an interest rate of 4% per year — plus 2% for any outstanding payment from the scheduled timeline.

Speaking to the press after attending a meeting with PKA today, Loke said the current loan repayment structure on the balance of the soft loan will result in a cashflow deficit in the port regulator's books.

"We [will] try to restructure the loan. Hopefully, the amount to be paid annually can be reduced so that at least there is no cashflow deficit in PKA," said Loke.

PKA, together with the government-linked company under its purview, PKFZ Sdn Bhd, generates revenue mainly from the leasing of port facilities in the two ports — Westports and Northport — in Port Klang, as well as the Port Klang Free Zone.

For the financial year ending Dec 31, 2018, PKA is expected to rake in a revenue of RM266 million. Meanwhile it will have to bear administrative costs of RM80 million, maintenance costs of RM6 million, and the RM222 million annual loan repayment.

"This will result in a cashflow deficit of about RM42 million, [and] every year, PKA will need to utilise its cash reserve [to satisfy its obligations]," said Loke.

According to him, PKA's main priority in the long run is to improve the profitability of the Port Klang Free Zone, which itself contributes a revenue of about RM80 million per year to the regulator.

PKA general manager K Subramaniam said the regulator currently has cash reserves of some RM380 million. He also shared that the lease terms for Westports, Northport and the Port Klang Free Zone are revised every three years.

Non-politician accountant proposed for PKFZ

Meanwhile, Loke said he has proposed for a non-politician accountant to be appointed as the chairman of PKFZ.

"This is a government-linked company (GLC). Pakatan Harapan has promised in the election manifesto that there will be no politically-linked elected representatives in the board of GLCs. It is also applicable for PKFZ," he said.

However, the same does not apply for PKA as it is a regulatory body, said Loke. "The distinction needs to be clear. PKA is a statutory body... You can expect politicians on the board [of PKA]," he added.