Wednesday March 13, 2013
Fong: I didn’t feel deceived by Ling
KUALA LUMPUR: A former Cabinet minister involved in the meeting that discussed land acquisition for the Port Klang Free Zone (PKFZ) told a High Court that he did not feel deceived by former Transport Minister Tun Dr Ling Liong Sik over the controversial project.
Former Human Resources Minister Tan Sri Dr Fong Chan Onn, 69, who read an extract from an exhibit, said it was his understanding that the purchase price of RM25 psf for the land stated in the Sale and Purchase Agreement (SPA) would have excluded interest.
The Alor Gajah MP repeated at least three times that his understanding (on the price as excluding interest) had not changed when asked to read different documents.
He said this was because parts of the extracts mentioned “matters of deferred payments” which he explained as “not paying in one lump sum, but over a period of time”.
“If you pay over a period of time, that carries with you interest. This basis implies a lot of fine-tuning with regard to interests and costs,” he said.
To another question by defence counsel Wong Kian Kheong, Dr Fong said he was familiar with the term discounted cash flow (DCF) method.
Dr Fong, who holds an MBA and PhD in Operation, Research/Industrial Economics from a university in New York, said he had taught finance at Universiti Malaya upon his return to Malaysia and was engaged by various government agencies to do viability studies on public investments.
“In particular, I led a research team from the university to analyse viability on Johor Port, Senai Airport and Kuantan Port developments. In those analysis, we rely on the DCF method in evaluating the viability of an investment,” he said.
Asked what he understood about the RM21 psf stated in a letter from the Valuation and Property Services Department’s (JPPH) and the RM25 psf stated in the SPA, Dr Fong said: “According to this evaluation, it stated the special price value is RM21 psf, taking into account infrastructure development that has to be taken by the vendor.”
The evaluation, Dr Fong said, further stated the payment for this development was not by cash but by deferred payment with conditions.
Using the DCF method, the base price of the land had to be increased to RM25 psf for it to come back to the present value of RM21 psf with a discount rate of 8.25%, as fixed by the JPPH, Dr Fong added.
“It can be above RM25 psf depending on payment period,” he said.
Dr Fong also said that the police had never approached him to take down his statement.
Dr Ling is alleged to have deceived the Government by not revealing to the Cabinet an additional interest rate of 7.5% annually in the RM1.088bil (at RM25 psf) purchase of the land for the PKFZ project at the Prime Minister’s Office in Putrajaya between Sept 25, 2002 and Nov 6, 2002.
Dr Ling, 70, also claimed trial to two alternative charges of cheating, which carry a lesser penalty.
The hearing before Justice Ahmadi Asnawi continues on March 18.