SPEECH BY Y.B. DATO’ SERI CHAN KONG CHOY MINISTER OF TRANSPORT AT THE SIGNING CEREMONY OF THE RM 1.

455 BILLION PRIVATE DEBT SECURITIES ISSUE FOR TRANSHIPMENT MEGAHUB BERHAD ON TUESDAY 12TH OCTOBER, 2004, MANDARIN ORIENTAL HOTEL, KUALA LUMPUR

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Y. A. B. Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak Deputy Prime Minister of Malaysia Y.Bhg Dato’ Abdul Azim Bin Mohd Zabidi; Chairman, Kuala Dimensi Sdn Bhd Y.Bhg Dato’ Nik Mohamed Din bin Nik Yusoff Executive Chairman, OSK Holdings Bhd Board of Directors of Transshipment Megahub Berhad

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Board of Directors of Kuala Dimensi Sdn Bhd

Distinguished Guests,

Members of the Press,

Ladies & Gentlemen.

Good Evening,

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I take this opportunity to congratulate Kuala Dimensi Sdn Bhd through its subsidiary Transshipment Megahub Berhad, on its success in obtaining the approval of the Authorities on the issuance of RM1.455 Billion Private Debt Securities Issue which comprises RM1.095 Billion Fixed-Rate Serial Bonds (“BONDS”) and RM360.0 Million Commercial Papers/Medium Term Notes (“CP/MTN”)

Programme for the Port Klang Free Zone Development Project. I

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would also like to congratulate OSK Securities Berhad as the Principal Advisor and Lead Arranger for this major fund raising exercise.

I understand that Malaysian Rating Corporation Berhad has assigned a rating of “AAA” to the Bonds and “MARC-1/AAA” to the CP/MTN”. This rating indicates the ability to repay principal and pay interest on

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a timely basis and also shows the confidence by the rating agency on the overall project as well as Kuala Dimensi’s competency to complete the project.

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Ladies and Gentlemen,

The Ministry of Transport and through its implementing agency, Port Klang Authority, has put top priority on the Port Klang Free Zone Project to ensure the success of this project. The establishment of the Port Klang Free Zone or PKFZ is aimed at making Port Klang a regional Distribution Hub as well as a commercial, industrial and

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logistics centre. At the same time, PKFZ would serve to attract and promote both domestic and international manufacturing activities for the export market.

The development of The Port Klang Free Zone by Transshipment Megahub Berhad through its parent company, Kuala Dimensi Sdn Bhd, shows that the private sector is increasingly contributing to the

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growth

of

our

country

by

directly

undertaking

government

development projects. The advisory, arrangement and subscription of such a large bond issuance by a single Universal Broker also highlights that the government’s Capital Market Masterplan has succeeded in creating strong financial institutions. I applaud OSK for being able to undertake such a transaction and I hope this bond deal will be very successful. In fact, the demand of this bond issuance by

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the institutional investment community will show that the Malaysian capital market has indeed grown deeper and broader with our government’s Capital Market Masterplan. The deal’s success will also show us that the investment community is supportive of government development plans even when they are undertaken through the private sector.

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Ladies and Gentlemen,

Since being designated as a National Load Centre in 1993, Port Klang has seen tremendous growth in its container throughput, rising by an average of 20% annually to handle 4.8 million twenty-foot equivalent units (TEUs) in 2003. It is now the 12th largest container port in the world. Consistent effort by the Government in expanding

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port capacity through the construction of new berth facilities has been among the reasons for this spectacular growth.

The Port Klang Authority (PKA) has done excellent work in coordinating and regulating the diverse port operations within Port Klang and in their overseeing of both terminal operators, namely

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North Port and West Port. The 1000-acres Port Klang Free Zone will further increase Port Klang’s attractiveness as a transshipment hub.

The growth in transshipment cargo at Port Klang has been spectacular at an average of 120% annually since 1993. Of late, much of this transshipment cargo has come from neighboring countries such as Indonesia and Myanmar. Transshipment cargo now

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accounts for more than 50% of Port Klang’s throughput and this percentage is expected to increase further.

The Port Klang Free Zone will further boost our transshipment cargo by providing additional facilities for industries to process raw materials brought in via Port Klang for subsequent re-export. By locating manufacturing facilities and logistics firms side by side within

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the Free Zone, Port Klang will be turned into an integrated trade, manufacturing and logistics hub.

With global container shipping expected to grow by 12% this year and between 9% to 10% in 2005, we feel that the global containerization trend will result in sustained container traffic growth worldwide and particularly in Asia. As such, the existence of logistics providers and

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excellent infrastructure facilities at Port Klang will allow it to capture a larger market share of global trade and to serve as a regional distribution centre. Transshipment of cargo is the way forward for global ports as growth in this area is not limited by the growth in the ports’ hinterland as is the case with indigenous cargo. Thus although indigenous cargo will remain key to Port Klang, the PKA’s strategy to boost transshipment cargo is a step in the right direction.

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When the Free Zone is completed by 2006, we expect global container trade to be even more focused on Asia. Already, 6 of the world’s largest container ports are located in Asia and the containerization of cargo in India and China will only lead to the greater use of containers in global trade. This will help boost the throughput of container ports such as Port Klang. With Port Klang strategically located on the Straits of Malacca, a key trade artery, it is

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well poised to directly benefit from Asia’s pre-eminence in container trade.

The implementation of PKFZ is carried out by the Jebel Ali Free Zone Dubai which is a joint venture project between Jebel Ali Free Zone International (JAFZI) and Port Klang Authority, whereby JAFZI will play the main role as Manager, Administrator and Marketer of PKFZ.

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The Joint Venture with JAFZI is the best option based on their experience and expertise in managing the most successful free zone in the world, The Jebel Ali Free Zone Dubai. The Government is confident that the development of PKFZ spearheaded by JAFZI will be a success and the government will continue to provide the strongest support to ensure its consequent development and further contribution to the national economy.

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Ladies and Gentlemen,

As you are aware, the Port Klang Free Zone Project was successfully launched on 2nd July 2004 by the Hon. Deputy Prime Minister of Malaysia on behalf of the Hon. Prime Minister of Malaysia. Following this, I understand that there has been heightened interest from various companies both local and international who are attracted to

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this project and are looking forward to the opportunity to locate and operate their businesses in PKFZ.

I wish to congratulate Transshipment Megahub Berhad, a subsidiary of Kuala Dimensi Sdn Bhd for all their efforts to take on new challenges in developing Port Klang Free Zone and in strengthening Malaysia’s place in the international arena as a major logistical hub in

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Asia. I also applaud OSK Securities Berhad for being the lead arranger, principal advisor and sole subscriber of this very significant bond issuance. They have proven that Universal Brokers too are capable of producing such a major bond issue in the market place. I wish Kuala Dimensi, TMB and OSK every success in this transaction.

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On this note, I would also like to take this opportunity to extend my appreciation to the Selangor State Government under the leadership of YAB Dato’ Seri Mohamad Khir bin Toyo, Chief Minister of Selangor and all the State Government Agencies who have assisted in one way or another to ensure the successful fruition of this national project. Thank you / Sekian Terima Kasih.