Malaysiakini
Sep 14, 07 2:31pm
A DAP legislator said today that he would ask questions in Parliament
and the Sarawak Legislative Assembly about the Auditor-General's
Report 2006 regarding the RM1 billion bridge replacement project
awarded to a company owned by a son of Chief Minister Abdul Taib Mahmud.
DAP's Chong Chieng Jen - the Bandar Kuching parliamentarian and Kota
Sentosa state assemblyperson - told a press conference in Kuching
that the AG's report was a 'damning audit report' about the affairs
surrounding the award of the seven-year contract.
The contract was given by the Sarawak cabinet to Kuching-based
Titanium Management Sdn Bhd in 2000 to replace 384 bailey(pre-
fabricated steel) and wooden bridges on a design-and-build basis with
an initial contract sum of RM551.01 million.
Total allocation RM1.02b
In November 2006, the state government reduced the number of bridges
to be built under the contract by 62 to 322.
However, it revised the contract sum upwards to RM947.84 million - an
increase of RM396.82 million, or 72% - according to the AG's report.
According to the AG's report, up to December 2006, a total of 259
bridges were completed with the remaining 63 bridges under
construction with interim claims totaling RM741.24 million.
It added that the state government estimated the total cost when all
bridges were completed by September 2007 would be RM947.84 million.
Under the contract between Titanium Management and the state
government, payment could be paid in cash or in kind (with land).
Up to December 2006, the contractor had submitted a total of 71
claims for progressive payments totaling RM741.24 million. Of the
total, RM500.95 million - including RM26.97 million interests (on
delayed payments) - had been paid to the company.
Chong said that based on the AG's report it would seem that RM240
million of the total claims had not been paid. Based on the
agreement, the government is liable to pay 2% interest per month on
delayed payments.
The agreement states that claims for progress payments of certified
work done must be paid within 26 days of the claims being received.
Ah Long's interest rate
Commenting on this, the opposition elected representative said the
interest charged - 27% per annum (compounded) - is almost equivalent
to Ah Long's interest rate.
Taib's eldest son Mahmud Abu Bekir holds 1,430,000 shares, or more
than 50% of the company equity. His major partner is Chris Chung Soon
Nam (900,000 shares) and a former state director of the Public Works
Department (PWD), Michael Ting Kuok Ngie (10,000 shares).
Chong, who read out parts of the AG's report to reporters, said the
report released earlier this week raised questions regarding the
contract award to a company registered only in 1998 with a paid-up
capital of RM2.4 million to undertake a government project valued at
more than half-a-billion ringgit.
Titanium has subsequently awarded all its contract works out to 44
sub-contractors.
According to the AG's report, the company had failed to conduct
detailed and complete preliminary studies as it was required to do so
before being awarded the design-and-build contract on a turnkey basis.
This had partly resulted in partly cost escalation when actual works
were carried out.
However, auditor-general said the contractor's completion rate of the
bridge replacement project was satisfactory - not a single bridge
project was behind scheduled time, it added.
Jabu's statement
Chong said the government must explain the serious cost over-runs as
it involved the people's money and he intended to raise the matter in
Parliament and the State Assembly next month.
Meanwhile, in what appeared to be a initial reaction to the AG's
report, Deputy Chief Minister Alfred Jabu, a close Taib ally, was
quoted today in the Borneo Post as blaming the delay in the
completion of certain federal road projects in Sarawak to the lack of
planning, control and supervision of such projects given to the state
government.
He said if the state had been given better control by the federal
authorities through PWD and other state agencies over project
planning, control, supervision and implementation some of the delays
could have been avoided.
Commenting on this, Chong said Jabu - who is also in charge of public
works - was only trying to divert public attention from the real
issue, such as the contract award and its huge cost over-runs given
to the company controlled by Taib's son.
"His (Jabu's) comments are ridiculous and laughable," he added.
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