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Losses Of Failed Tuna Port Project Must Be Disclosed


Penang Chief Minister Lim Guan Eng

The Fisheries Development Authority of Malaysia (LKIM) must explain the losses incurred in Malaysian International Tuna Port Sdn Bhd (MITP) project in Batu Maung, said Penang Chief Minister Lim Guan Eng.

MITP, a joint venture company between Blindforce Sdn Bhd (60%) and LKIM (40%), was incorporated in 2004.

It was tasked with developing a fully-integrated fisheries port specializing in tuna by 2008 near the Second Penang Bridge, which is now under construction.

“But until today, only two small buildings have been built on a 25-acre site under a 32-year concession deal,” said Lim.

MITP issued bonds worth RM240mil through OSK Investment Bank and RHB Investment Bank based on letter-of-undertaking from the Agriculture and Agro-based Industry Ministry in 2006.

But MITP defaulted on payments last November and legal action is being taken on the government letter-of-undertaking.

The Auditor-General Report 2009 had raised a question on whether the government would be burdened with the debts due to its letter-of-undertaking.

Recently, a ministry-written parliamentary reply to Lim stated that the LKIM’s 40% equity in MITP was offset by the land value in the project’s concession area, and did not involve any cash investment.

On June 12, 2010, LKIM took over the port operations when MITP was found incapable of running it.

On Aug 17, 2011, the federal government decided to cancel the concession agreement between LKIM and MITP.

But Lim said the government agency had been burdened with heavy losses by the botched project.

“There is no way LKIM did not incur losses.

“LKIM must disclose publicly its losses following the failure of the project,” said Lim in his blog posting.