Port Klang Free Zone
Port Klang Free Zone (PKFZ) is a 1,000-acre (4.0 km2) commercial and industrial zone established in 2004 in Malaysia. It is a regional distribution hub as well as a trade and logistics centre offering extensive distribution and manufacturing facilities. It is located along the Straits of Malacca, Port Klang, Klang, Malaysia. The PKFZ was previously managed by Jebel Ali Free Zone Authority (JAFZA). However, it was taken over and rebranded by a local company in 2007. The PKFZ offers various investment incentives to investors such as tax exemptions on most products and services, subsidies, allowing wholly foreign owned enterprises, free repatriation of capital and profits and incentives for research and development, training and export.
Port Klang is positioned to take advantage of the Kuala Lumpur International Airport. The KLIA Advance Cargo Center can handle one million tonnes of cargo annually with the capability to expand to 3 million tonnes per year. The center provides integrated logistics services.
The Port is also closely linked to Northport and West Ports in Port Klang, the 16th busiest port in the world.
Controversy began when the Malaysian Parliament's Public Accounts Committee met with the Port Klang Authority (PKA), because of dissatisfaction with huge cost overruns amounting to RM 3.5 billion (USD 1.0748 billion) associated with the Port Klang Free Zone. The original cost of setting up the integrated free zone was supposed be RM1.845 billion but increased to RM4.6 billion when the project was completed four years later.
PKA purchased 1,000 acres (4.0 km2) of Pulau Indah land from Kuala Dimensi Sdn Berhad at RM 25 per square foot for a total consideration of RM 1.8 billion (inclusive of interest). Kuala Dimensi made a capital gain of RM 993 million because it had purchased the land from Pulau Lumut Development Cooperative Berhad for only RM 95 million (at RM 3 per square foot). Moreover, the Minister of Transport saw it fit to reject the Attorney-General's view that the land could be acquired for "public purpose" under the Land Acquisition Act at RM 10 per square foot.
In 2007, the Malaysian Government gave a soft loan of $1 billion to Port Klang Free Zone. In the press release, The Ministry of Transport, Malaysia put the blame on the previous regional industrial park management company of Port Klang Free Zone, JAFZA for mismanagement. The PKFZ initial plan was to develop in two phases, covering 500 acres (2.0 km2) at the cost of RM 400 million. However, the JAFZA advised PKFZ to develop the entire project in a single phase, costing RM1.845 billion.
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