Malaysia Cabinet Said Port Klang Loans Were Legal

Written by Our Correspondent

Thursday, 05 August 2010

Exhaustive secret 2007 cabinet memo details approval of billions in loans for ill-starred port project Malaysia's cabinet, according to a secret June 22, 2007 memorandum, retroactively approved the legality of billions of ringgit in supposedly illegal loans for the increased cost of development at the scandal-scarred Port Klang Free Zone for which a top Malaysian Chinese Association nonetheless has been charged with fraud. Some websites first uploaded the memo, which Asia Sentinel obtained in translation, as the scandal grew in proportion starting last August. The memorandum is marked "Rahsia" or "Secret." Since cabinet documents come under Malaysia's stiff Official Security Act, passed in 1972, which allows for imprisonment up to 14 years for violating the statute, they have taken it down. Ling Liong Sik, the 67-year-old former head of the MCA who retired in 2003, has been charged with deceiving the Malaysian cabinet in 2003 over the affair. Ling pleaded not guilty and was freed on RM1 million ringgit bail. Four other individuals have been arrested as well. In addition, sources in Kuala Lumpur say, Ling's successor as transport minister, Chan Kong Choy, an MCA deputy president, was at the center of issuing guarantee letters for bonds for the company building the massive port project before he left office in 2008, despite the fact that cabinet approval was required. There has been no indication yet that he would be charged, although sources in the United Malays National Organization, the leading component of the ruling national coalition, say others may well be pulled in. Certainly, the 2007 cabinet memo is clear on Ling's actions, but appears to go along with them retrospectively: "To finance development projects, bonds issued by Special Purpose Companies (Special Purpose Vehicle) which was created by [Kuala Dimensi, the entity given authority over the project]," the memo says. "The bonds have been given AAA rating and attracted the attention of many investors. It is because the previous YB Minister of Transport [Ling] issued a letter of support saying the government will at all times ensure that Port Klang Authority will meet all its obligations according to the duration and number of loans set." The memorandum indicates that the cabinet knew most of the details about the vast cost overruns, giving a detailed description of the overages on Kuala Dimensi's part, which catapulted from RM 1.088 billion (US$343.05 million) RM 4.63 billion during the course of the project. The port, whose ultimate cost could dwarf any of former Prime Minister Mahathir Mohamad's previous projects, was conceptualized by Mahathir as a multi-modal development modeled on the Jebal Ali free zone in Dubai , presumably capable of rivaling Singapore, whose efficiency and organizational expertise make it Southeast Asia's regional shipping hub: "PFKZ has planned to attract foreign investors to Malaysia, to enhance national competitiveness and to make Port Klang as the main load in the region. This project will be a major catalyst in the development of economic activities and development in Pulau Indah," the memorandum says. However, Port Klang, hundreds of kilometers up Malaysia's west coast, is now being rivaled by the Iskandar Development Authority, better situated geographically, next to Singapore itself. Unfortunately, in addition to the other problems, as Asia Sentinel reported on Aug. 24 and Nov. 27, 2009, the free zone project appears to have turned into a massive scandal, with politicians of all stripes helping themselves to vast amounts of money through artificially inflated land prices, contacts for surveyors and a myriad of other methods. While the prevailing impression in Kuala Lumpur is that the country's leaders knew little or nothing about the port's development, the secret memo gives the impression that it was closely watched by top government leaders: "A series of Cabinet meetings have been held since 1999 to consider the implementation of the project PKFZ especially in terms of land acquisition issues and financial allocations," the memo says. "The Ministry of Finance and the Department of the Attorney General have raised concerns about the financial need to be borne by the government and the status of land prices and land ownership issues involved with the project. "On October 2, 2002, the Cabinet agreed to the purchase of land in Klang for PKFZ after having been informed that the project is viable without government financial assistance and legal issues of land had been settled. A review by the Department of the Attorney General regarding the issue of land acquisition was also presented." After a lengthy description of the situation, the report concludes: "The Economic Planning Unit, Prime Minister and the Ministry of Transport have no objection to the proposed retrospective approval for the increased cost of development projects PKFZ, Pulau Indah, Selangor and the provision of soft loans to the Port Klang Authority and the government guarantee in relation to the issuance of bonds by Kuala Dimensi Sdn. Ltd." Significantly, the legality of the retroactive guarantee appears to have been approved by the attorney general, Abdul Ghani Patail as well: "The Department of the Attorney General has no such objections to the proposed terms of paragraph 19 of the Memorandum." Ultimately, the guarantee of the RM4.63 billion led to potential liability to the Malaysian government of nearly triple that amount – RM12.45 billion if the Port Klang Authority defaults – which a report the port authority's own directors say is inevitable because the port can't generate enough revenue to meet the obligations. Read more.

KL ministers make us angry – MP

by Nancy Lai

August 5, 2010, Thursday

KOTA KINABALU: Federal ministers should refrain from making statements that hurt the feelings of Sabahans, Putatan member of parliament Datuk Dr Marcus Mojigoh said.They should also not generalize problems in Sabah with those in Peninsular Malaysia or Sarawak, he added.

Speaking at the signing of the Collective Agreement (CA) between Corporate Dynamics and the Sabah Water Industry Employees Union (KPPIAS) for its unionized employees yesterday, Marcus stressed that the situation in Sabah was different from that in Sarawak and Peninsular Malaysia.

Taking for example the statement by Human Resource Minister Datuk Dr S. Subramaniam on the government considering the possibility of employing illegal immigrants as foreign workers to meet the high demand from employers, Marcus said that solution would not be appropriate for Sabah.

Marcus, who is also the Corporate Dynamics chairman, pointed out that the illegal immigrant problem was a perennial one for the state and the people here were already upset with the government for being unable to fully resolve it.

“Sabahans want the government to resolve the issue because the number of illegal immigrants in the state is growing. That is why the illegal immigrant issue is very sensitive to Sabahans who deem it a priority issue,” he said.

“We cannot generalise the issues in Peninsular Malaysia and Sarawak with Sabah because the scenario is different. It is simply not right to say that the government wants to legalise illegal foreign workers so that they can work in the country,” he stressed.

According to Marcus, both SHAREDA and the Federation of Sabah Manufaturers (FSM) were in support of the proposal but this was because locals were not interested to work in their sectors.

“If they ask me whether I agree with the statement to legalize illegal immigrant employees, my answer is no,” Marcus said, adding that what Subramanian said was his personal opinion and did not reflect how leaders in Sabah felt about the issue.

Marcus also appealed to federal ministers visiting Sabah not to make statements that would make it difficult for state leaders to explain to the people.

“They should instead bring in lots of allocation to resolve the perennial problems in the state, like the presence of illegal immigrants and the insufficient water as well as electricity supply.

“They don’t understand the situation in Sabah. How can they say illegals are not a priority? This type of statement angers the rakyat and makes it difficult for leaders in Sabah.

“I am very angry with this kind of statements,” Marcus added.

Source:Borneo Post

Hantu Laut

I would look at it the other way.

Some Federal ministers are not fit to be there.These irritating cocky know it all smart alecs think they are clever at making smart sounding speeches. They are not. The shallowness of some of their statements other than that concerning Sabah are equally much to be desired.

Some bloggers in Peninsula Malaysia are much smarter than some of our federal ministers who 'can't even string two sentences properly let alone say it' (a quote from the Book of Raj)

Sorry, mates! Sabahans think you are just plain stupid, flexing your muscles to intimidate just because you think you are on a higher pedestal.

We have plenty of illegals in Sabah and we have no objection for Mr Subramaniam to take them for employment in Peninsula Malaysia.That would at least help lessen the burden and adverse impact of these aliens on our society. Let us import our labour through the proper channel.

You can have them lock, stock and barrel, after all your minister in the PM's Department Idris Jala who had shown the extent of his intellectual capacity by confirming Najib's policy loud and clear that the illegal problems in Sabah is not a priority and a non issue as far as the Federal government is concerned.

Even if it is not, why don't you just shut up and keep it to yourself instead of embarrassing the prime minister.Now, that you have said it, it would be ammo for the oppositions in the next GE.

You see, stupefying power is not necessary the best policy and can make one look stupid.

The Sand Smugglers

Singapore's business-friendly climate has seen the country grow by leaps and bounds -- literally. But it's all based on a murky, billion-dollar illegal trade in sand.

BY CHRIS MILTON | AUGUST 4, 2010

The causeway linking Singapore to the southern tip of the Malaysian peninsula is normally clogged with cars and trucks making the short international journey, but things got particularly bad on Feb. 1, when traffic came to a grinding halt. Thirty-seven trucks were abandoned where they stood on the Malaysian side, just yards away from a customs checkpoint, their drivers having simply walked away. Upon further investigation, it was discovered that they were carrying an illegal substance -- but not drugs, illegal migrants, or precious jewels. They were carrying sand.

Singapore's economy quite literally rests upon maintaining a huge and continuous supply of sand -- and smuggling has become a multibillion-dollar trade, driving a huge web of corruption and theft in a country renowned for honest business practices and corporal punishment.

The tiny island nation, one of the 20 smallest states in the world, has enjoyed a phenomenal economic boom since the 1980s. In the space of only 30 years its population has doubled and its GDP has exploded by more than 1,000 percent (making it now the wealthiest country in Asia). Singapore's economic success is largely based upon the phenomenal growth in its services industry. The country has taken advantage of two factors: its ability to process silicon for use in microchips and electronics, and its positioning as a regional business hub within Asia, connecting industrial leaders and business executives from across the continent.

But the boom times have come at a cost. The country has, quite literally, run out of space. Since Singapore's independence in the 1960s, its land area has grown from 581.5 to 710 square kilometers. By 2030, the country plans to expand by another 70 square kilometers. That would see Singapore's land area grow 30 percent from its original size, giving it the same area as New York City.

This added girth requires dumping a mind-boggling quantity of sand into the ocean, in what is known as land reclamation projects. To reclaim 1 square kilometer of land from the sea, up to 37.5 million cubic meters of sand are needed -- the equivalent of filling three and a half Empire State Buildings. Singapore's main airport is built almost entirely on reclaimed land, and one of the largest recent projects is the aptly named Marina Bay Sands project, a five-star hotel and casino on Singapore's shoreline whose major investors include the owners of the Las Vegas Sands Corp.

There are two types of sand generally used for land reclamation projects: sea sand, which is dumped into the ocean as filler, and river sand, which has a far finer granularity and is a central ingredient in concrete, which Singapore uses in vast quantities to fuel its monumental building program.

Although Singapore is itself an island nation, it ran out of its own sand many decades ago. Today the entire island consists of urban areas or protected-environment sanctuaries. This shortage has fueled a massive industry, worth at least $1 billion between 1998 and 2008. And it's only growing: In 2008 alone, according to its own figures, Singapore imported more than $273 million worth of sand, more than any other country in the world. But these numbers -- which account for only the legal trade in sand -- are only the tip of the iceberg.

This insatiable need for sand has created a slew of problems not often associated with this by-the-book country, which is rated by Transparency International as the third-least corrupt country in the world, behind only Denmark and New Zealand. In recent months, however, a number of illegal sand excavation activities have been traced back to Singaporean companies. Whether this smuggled sand entered Singapore through government collusion or willful ignorance is hard to ascertain, but questions are increasingly being asked about how much officials really know about the quantity and provenance of sand imports.

Until recently, the vast majority of it has come from right next door: Malaysia, which lies less than half a mile away across the Singapore Strait. And that's odd, as Malaysia has had a blanket ban on the export of river and sea sand for more than 10 years, since it discovered that materials for its own land reclamation projects were being illegally diverted to Singapore.

There are no hard figures regarding the extent of the illegal trade between Malaysia and Singapore. The best official figures available come from the United Nations' Comtrade database, which lists countries' declared trade figures for a variety of commodities. But even a cursory comparison of its data shows that something is drastically amiss. For example, in 2008, Singapore declared it had imported only 3 million tons of sand from Malaysia -- yet Malaysia's figures show that a staggering 133 million tons of sand were reportedly exported to Singapore despite the 10-year blanket ban.

It's hard to say whether either figure is accurate, but it's clear that vast quantities of Malaysian sand are being smuggled into Singapore. A recent report by the Malaysian civil servants union estimates that 41 percent of Malaysia's officials are involved in some form of corruption. Mohamad Khir Toyo, the former governor of Malaysia's most prosperous state, Selangor, has even insinuated that his successor is allowing the illegal trade to continue unhindered. "Sand is being stolen every day, and not a single lorry has been seized and no one has been charged," he said in May. "I suspect certain leaders from a certain party … are protecting the culprits."

In June, an investigation by the Malaysian newspaper the Star blew the lid off the sand smuggling trade. The paper's reporters followed a Malaysian dredging company working on the Johor River, about 50 miles inland from the Singapore Strait. The company had won a transport license by claiming it was shipping extracted sand internally, to the Malaysian ports of Tanjung Pelepas or Danga Bay. The shortest route to the destination, however, took ships through Singaporean waters. Once the sand was extracted, the barges sailed downriver to the Malaysia-Singapore border and passed through customs. The barges never made it to the claimed destination -- they simply stopped at the Singaporean jetty of Pulau Punggol Timur, presented freshly forged paperwork, and unloaded their cargo.

The newspaper estimates that around 3 million cubic meters of river sand have followed this route since 2007, making smugglers a cool profit of $77.8 million. Understandably, the Malaysian government is not pleased, having been deprived of $11.5 million in tax revenues. But the million-dollar question is how such massive shipments are able to reach Singapore without anyone being the wiser. For its part, the Singaporean government flatly denies that it condones the import of illegal sand.

"The documentation that sand suppliers are required to show include licenses to dredge or extract sand at specific sand locations in the source countries, draft survey reports, and bill of loadings," K. Senbagavalli, a spokeswoman at the Singaporean Ministry of National Development, said in an interview. "[We verify with] sand concession holders of source countries regularly that the documentation provided by the sand suppliers is authentic and accurate.... To date, the sand vendors have all been able to provide valid documented evidences of clearance from the source countries."

But this oversight depends on reliable paperwork -- and reliable officials -- throughout the supply chain. If corruption is as rife as it appears to be within Malaysia, the documents are not worth the paper they're printed on.

Although the black market Malaysian trade appears to be thriving, Singapore's addiction requires far more sand than one country can provide. And Indonesia, a vast and sprawling archipelago of more than 17,000 islands (the nearest of which to Singapore lies about six miles to the southeast), has jumped headlong into the breach. Many of Indonesia's islands that lie within easy reach of Singapore have few or no inhabitants -- and Singapore has taken advantage of this geography, going so far as to wipe some places entirely off the map.

Rapacious exploitation, which saw up to 77 percent of the world's sand dredgers operating in seas between Indonesia and Singapore, soon took its toll. By 1999, some islands had been mined so extensively that plans were being drawn up for sea walls to protect inland citizens from rapid erosion and rising seas. In 2003, Nipah island, which lies on the Singapore-Indonesia border, disappeared completely under the waves, "with only 3 to 4 palms trees visible to mark the island's location," according to the local NGO Wahana Lingkungan Hidup Indonesia.

Indonesia's export figures show that, in the five years before 2002, it shipped at least 150 million tons of sea sand to Singapore in total. But the black market probably accounts for at least double this figure: In 2003, smugglers excavated and shipped an estimated 300 million cubic meters of sand, worth $2.5 billion. In 2007, following Malaysia's lead, the Indonesian parliament issued a blanket ban on sea sand exports. It was completely ignored, even by the Indonesian government. Over the past five years, a further 24 islands are believed to have disappeared under the waves. Even if officials were serious about stamping out the trade, it's simply too easy to steal sand from Indonesia's thousands of miles of unguarded coastlines. All any would-be thief has to do is pick a remote spot where large and loud dredging equipment won't be easily spotted and work quickly under the cover of darkness. They can return to Singapore safely within a matter of hours and, using forged documents, unload the cargo.

And yet Singaporean officials still profess ignorance. Beyond the enormous variance in official import-export figures, there's simply no getting around the fact that Singapore's land mass has grown by leaps and bounds -- so the landfill is certainly coming from somewhere. Thus far, they've managed to escape the repercussions for a willing complicity in this trade by feigning surprise at bogus paperwork. For the time being, the trade is making all players happy and rich.

Singapore is poised for a bright future: It is booming economically and has positioned itself as a world leader in urban sustainability. But to fulfill that promise, however, it must first swallow an unpalatable truth -- that its prosperity has come at the cost of it neighbors' corruption and environmental destruction. Size isn't everything; the country's sterling reputation is now at stake.

Source:FP

Stop Investing In Coal, You Idiots !

Hantu Laut

"Coal is the single greatest threat to civilization and all life on our planet." – James Hansen, NASA's top climate scientist

We are getting stronger tail end of the typhoons when they lay their destructive paths across the Philippines bringing bigger and more intense waves hitting our shores, eroding shorelines, damaging seashore settlements and bringing with it heavier rainfall causing floods and landslips.

Many shorelines on Sabah's western seaboard have changed in form due to heavier waves and stronger sea current pounding the shores.Coral reefs are dying, habit and habitat of marine creatures are a changing due to rising sea temperature.

Where there used to be land are now part of the sea.

The most noticeable adverse reaction of global warming and man's foolhardy actions of fouling up divine creations is the disappearance of most of my family land at Meruntum Bay, just about 12 km from Kota Kinabalu city.

Almost 50 percent of what used to be our land with beautiful stretch of beach and casuarina trees lining the beach have now disappeared under water impacted by global warming and indiscriminate land reclamation of Kota Kinabalu sea front over the years, done with EIA approval.

I suspect the huge reclamation at Sutera Harbour might have altered the sea current causing erosion that seriously damaged proximate shorelines over the years.

Sabah, is no more "Land Below The Wind" as described by Agnes Keith in her book of the same name.The weather pattern has completely changed.When it is supposed to be dry it's wet, when it's supposed to be wet it's dry.

We are getting more freakish weather bringing stronger winds whipping up huge waves pounding our shores, heavier rainfalls causing landslips and flash floods and hotter days during the dry months bringing drought and widespread bush fires are happening more often than not.

The past two weeks Kota Kinabalu and surrounding areas have been pounded daily by heavy rainfalls causing flash flood and landslips.

Climate change, I guess have impacted the changes.Even more disturbing strange things are happening below the sea surface, destroying beautiful coral reefs and changing the habits and habitats of marine creatures.

Just two weeks ago widespread coral bleaching occurred in marine parks throughout Malaysia.Pulau Redang,Pulau Tioman and Pulau Tayar in Peninsula Malaysia was temporarily off-limit to divers and snorkelers.Widespread bleaching was also notice at Sepanggar Bay at Kota Kinabalu in Sabah.

Being a blue water angler for the past 30 years I can't help but noticed changing sea conditions in the areas I am familiar with.We are getting more unpredictable storms coming out of nowhere anytime of the day or night, whipping up waves from zero to almost 3 meters in a matter of hours.I have been caught out by such freakish weather on number of occasions, one with almost tragic consequence.

My fishing trips with friends would take us one to two nights to about 30 to 50 miles offshore. Reason being, both pelagic and sedentary fish are more active at night which give us better and bigger catch.The past three to four years something unusual is happening below the sea surface.There is a complete reversal of the fish eating pattern changing them to be more active during the day and more difficult to find at night.Could global warming be the cause of this strange phenomenon?

Even more disturbing is the dwindling catch and disappearance of certain specie of fish due to over fishing. The waters of Sabah's coast are over fished by fish bombing, fish poisoning, indiscriminate trawling and to lesser extent subsistence fishing and the increasingly popular recreational fishing.

Men are having mortal combat with the environment, killing it slowly but surely, ignoring that we are on an island in the universe surrounded by ocean of emptiness and neighbours without life-supporting environment should we one day need to leave this planet, we really have no where to go.

Sciences have not yet found a formula to take us to the far edges of the universe where life-supporting planets might exist. So, we should make the best and take care of the environment to save this planet from destruction.

Having said all that we again are going to face another environmental disaster that would add to the already highly-strained environment we live in if the Federal government continue to ignore the wishes of Sabahans of not wanting the proposed coal-fired power plant that would smear not only the environment but also the people's health.Worst still, the plant is in close proximity to one of the biggest and most delicate coral reef formation in the region in a highly fragile eco-system.

The Federal government has the option of diverting offshore gas for power generation that is kind to the environment but instead placed more importance to channeling the gas to Bintulu for export instead of giving Sabahans what rightly belong to them to use for clean power generation that is friendly to the people's health and clean to the environment.

For many years and until now the gas have been flared, in layman's term, burned.The moment Sabahans wanted it for power generation it raises eyebrows in the Federal capital suddenly making it commercially viable to pipe the gas all the way to Bintulu but not viable to pipe to KotaKinabalu for power generation to supply electricity to the whole state.

If West Malaysians have accepted coal powered stations in their midst without any questions it doesn't mean Sabahans are made from the same mould and should accept such wilful act of the government trying to shove down our throat something we found repulsive and dangerous to our health.We certainly still love,cherish and care about our environment and the clean air that we breath.

We don't want to be like Kuala Lumpur with perpetual blanket of smog hanging over the city and yet the city dweller are happy to drive their cars into the city contributing more pollutants to the already unhealthy air environment. This city has one of the most screwed up public transport system of a modern city in the world, a mass transit, if you can call it one, that do not connect.Three different systems that do not meet on a common interchange.To change system one has to cross roads,streets ,longkang and what not. The city dwellers have been shafted by nothing less than their own government.Inilah "Malaysia Boleh"

Adding chaos to the already dysfunctional system are the worst taxi drivers of the world who cheat passengers at their whims and fancies and the government seems helpless to do anything. Are they really helpless, or they are just apathetic? Who is the minister in charge, should not he be ashamed that for donkey years they have not been able to discipline the crooked taxi drivers?

The diversion above is to show that these are people who pretended to be clever and have proven to be not.They have screwed up aplenty.

These are the same people who admitted being misled by one minister making the whole cabinet looking like a bunch of fools and now allow the pseudo-technocrats in Tenaga to shove crap down Sabahan throats that there is clean coal. Like everything else, there is only clean coal if there is discipline.Knowing Malaysian maintenance culture, who can't even keep their public toilets clean, can you expect them to keep coal clean? Just visit any of our major airports and see how clean and nice smelling the toilets are.The ministers don't know because they all go through VIP rooms.Even if they do know, they probably do not care, after all they are not the one using it.

The story would have been different if there have not been safer and cleaner alternative.We have and we are being deprived of it for reason of greed and couldn't care less attitude of the government.

You can call us stupid, uncultured, anti-development and anti-progress but that's the way we are.

All we asked for is to give us back what rightfully is ours in the first place.

Stop Investing in Coal.

A coal power plant is demolished in Weishan County, China. China plans to invest 265 billion dollars in renewable energy by 2020 to wean itself off polluting coal.

Investments in conventional coal-fired power plants without carbon capture and storage (CCS) have to stop immediately in order to limit global warming below 2°C. Key investment areas for power and heat production should be renewable energies, storage systems, and grid development.(Photo: Reuters)

The EIA that approved the Sutera Harbour reclamation works was responsible for destroying part of my valuable family land which require million of ringgit to restore to its former self had now made me sceptical of any EIA report issued by the government.

I don't believe there is absolutely clean coal technology, it may reduce some CO2 emission into the atmosphere but it can create other problems. The sludge and effluence of dewatering low grade coal has to go somewhere? Where?

Holding ponds? For how long? Read the disaster in the US here.

A home in eastern Tennessee is partially buried in contaminated waste from a coal-fired power plant. View a slideshow of the damage caused by the billion-gallon spill on Dec. 22, 2008. Courtesy: United Mountain Defense

Where else! eventually the sea the victim.