Ministry studying ways to boost PKFZ's revenue to help repay soft loan

SHAH ALAM (Aug 2): The Transport Ministry is looking at ways to increase the revenue of the Port Klang Free Zone (PKFZ) to help the Port Klang Authority (PKA) settle the RM3.8 billion soft loan it took from the government.

"Currently, the revenue of PKFZ is still not at a satisfactory level because PKA took a heavy loan from the federal government to build PKFZ," said Transport Minister Anthony Loke told reporters after opening global shipping company Ocean Network Express' main Malaysian office, here today

"Right now the government, through PKA, is repaying the loan and we are looking at the ways to increase the value of PKFZ and (the) revenue generated," he said.

PKA had taken the loan from the Finance Ministry back in 2013 — payable over 19 years beginning 2018 — to develop PKFZ. In 2017, the ministry restructured the loan repayment to be payable over 29 years.

The port regulator is scheduled to make annual payments of principal plus interest of RM222 million. The obligation for the first two quarters of 2018 has already been paid.

Loke said the ministry is seeking to boost PKFZ's revenue within the current government's five-year term.

"At the end of this five-year term we must show to the public that the government can deliver some good and positive results from the PKFZ.

"I don't want to go into details (on how to increase the revenue contribution) but of course we hope PKFZ will have more and better revenue for PKA, so that (PKA) can settle their debts," he said.

Loke stressed that improving PKFZ's performance is a major priority for the Transport Ministry.

"That's why we have appointed a professional to be at the PKFZ and we want to ensure that all these GLCs (government-linked companies) including PKFZ will not have political interference," he said.

PKFZ is an integrated 1,000-acre free commercial and industrial zone providing facilities for international cargo distribution and consolidation centre.

The project attracted controversy and public scrutiny after it was revealed that its original projected cost of RM1.96 billion had escalated to RM3.52 billion, excluding interest costs, as at end-2008.

The cost was later said to have grown to RM7.45 billion, including the additional interest cost from the soft loan and interest cost from deferred payments to PKFZ's turnkey developer Kuala Dimensi Sdn Bhd.

Loke today also commented on news that investors were in talks with the government to further develop Port Klang and Bukit Kayu Hitam as e-commerce hubs.

He said he has yet to be briefed on the matter. "As of now there is no complete plan yet but we are open to looking into it," he said. — theedgemarkets.com

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