Malaysian lawmakers Wednesday called for a probe into a former transport minister's role in a multi-billion-dollar scandal over a free-trade zone that suffered a massive cost blowout.
The Port Klang Free Trade Zone, a commercial and industrial project south of the capital, was conceived as a 1.82 billion ringgit (539 million dollar) venture constructed over 1,000 acres (405 hectares).
However costs are now expected to balloon to 12.5 billion ringgit, making the affair one of the country's biggest financial scandals and a major embarrassment for the government.
A parliamentary committee into the affair recommended that the Malaysian Anti-Corruption Commission (MACC) investigate letters of guarantee issued by Chan Kong Choy who served as transport minister until 2008.
It said that Chan and O.C. Phang, former head of the Port Klang Authority which runs the zone, issued letters to help secure loans for the project developer that placed the government as guarantor without authorisation.
"The MACC should investigate the matter closely because the letters were issued without approval by the finance ministry... (Chan) can also be convicted for criminal breach of trust," the Public Accounts Committee (PAC) said in a report.
Committee member Tony Pua said the project's developer, owned by a powerful lawmaker in the ruling coalition, ran out of money and received loans from the government and letters from Chan to guarantee a 3.6 billion ringgit bank loan.
"As a result of the letters signed, the government is now liable for the 3.6 billion ringgit owed by the developer to the banks," Pua, an opposition lawmaker, told AFP.
He said a report by the Port Klang Free Trade Zone's external auditors indicated it would be loss-making until 2029 because of debt servicing costs, and would only break even in 2051.
"With interest costs pegged at 5.0 billion ringgit, the overall cost of the project is expected to balloon to 12.5 billion ringgit," he said. "This is Malaysia's biggest financial scandal ever."
Prime Minister Najib Razak, who set up a high-level taskforce last month to look into the affair, pledged his government would not hinder the investigations.
"Input from the PAC will be taken into consideration and when they (the taskforce) are ready to make their report, the government will consider this," Najib told reporters.
"We will not cover up any weakness or wrongdoing or whatever else violates the law," he added.
Najib came to power in April with a pledge to tackle corruption which is endemic in Malaysian politics and society, and a key factor behind the government's disastrous performance in 2008 elections.
