(Petaling Jaya, Monday): Deputy Prime Minister Najib Tun Razak appears to promote transparency, accountability and good governance by demanding that Ministries must answer for the instances of mismanagement disclosed in the Auditor-General’s 2006 Report released in Parliament last week. Najib was referring to glaring cases highlighted in the Report involved the Youth and Sports Ministry which said the government paid RM 8.39 million more than the market price in 2002 for the purchase of 13 items for the National Youth Skills Institutes (NYSI) programme, such as :-

• 146 sets of screwdrivers bought for RM 224 per set when the market price is only RM 40 per set;

• 82 sets of Staedler Mars technical pens bought for RM 225 per set when the market price is only RM 120 per set;

• 90 sets of Faber Castell technical pens bought for RM 1,147 per set when the market price is RM 160 per set;

• 17 sets of technical books consisting of 10 titles priced at RM10,700 per set when the market price is only RM 417 per set;

• 5 units of 3.1 megapixel digital camera that was bought for RM8,254 per unit when the market price was only RM 2,990 per unit.

• 650 sets of plastic vases bought at RM 42.80 per set when the market price is only RM 5.20 per set:

• 3 sets of settee bought between RM 8,250-RM9.075 per set when the market price is only RM 1,500 per set;

• two tower cranes bought for RM 5.72 million when the market price is only RM 2.98 million

• 60 used cars bought at a price of RM 4.24 million when the market price is only RM 2.8 million an excess of RM 1.44 million;

• 152 desktop computer packages bought for RM 4.5 million when the market price is only RM 1.4 million, an excess of RM 3.1 million;

• 420 sets of cement mortar boards bought at RM 1,027 per set when the market price is only RM 150 per set;

• 3 cabins bought for RM 141,900 per cabin when the market price is only RM 20,000 per cabin;  and

• 2 units of two-tonne car jack bought for RM 5,471 per unit when the market price is only RM 50 per unit.

These widespread abuses of public funds in the NYSI are only a tip of iceberg as there are many other cases of misuse of public funds outlined in the 2006 Auditor-General’s report. As Minister, Datuk Azlina Othman must get to the bottom of this scandal explain why their spendings were not in order, and take action against errant officials to demonstrate that she is not involved in this shameful scandal.

On the other hand, Najib should show leadership by example and take his own advice that Ministries must answer fund mismanagement and misuse disclosed in the Auditor-General’s 2006 Report by explaining the RM 6.75 billion scandal of 6 Offshore Patrol Vessels(OPV) that has either not been delivered or not operational.

Najib must explain why the contract price was allowed to increase twice from RM 4.9 billion to RM 6.75 billion or 38 % even though the OPVs were either not delivered or not operational

The RM 6.75 billion OPV scandal is the largest single case of misuse of funds in the 2006 Auditor-General’s Report. 6 OPVs were ordered initially at RM 4.9 billion. This was subsequently increased to RM 5.35 billion in September 1998. All the 6 OPVs were supposed to be delivered by April 2007 with the first delivery on March 2004. However only 2 OPVs were delivered so far and the 2 OPVs are not fully operational as the technical specifications required are still not completely performed.

A penalty of 0.5% per month based on the contract value is imposed for any delay. However such penalties can not exceed RM 53.5 million, a very generous self-imposed limit by the government. The first OPV was late by 27 months and the second OPV was late by 18 months but yet both are imposed penalties of RM 53.5 million each due to the self-imposed limit.

The other four OPVs are still not delivered. The Auditor-General Report estimated that the government can claim at least RM 214 million in late penalties for the late delivery of the 2 OPVs and nopn-delivery of the remaining 4 OPVs. However in another remarkable and unwarranted act of charity and generosity, the Cabinet on 29.11.2006 waived the claim of penalties.

Worse, in a continuing act of generosity and charity the government increased the contract price by RM 1.4 billion in January 2007. The cost for the 6 OPVs had risen by RM 1.85 billion or 38% from the original contract price of RM 4.9 billion to RM 6.75 billion, ie to RM 5.35 billion in September 1998 and again to RM 6.75 billion in January 2007.

Najib must explain why the contract price was allowed to increase twice from RM 4.9 billion to RM 6.75 billion or 38 % even though the OPVs were either not delivered or not operational. Najib must also explain why the government surrendered and waived its claim for late penalties of RM 214 million. More importantly why is the government continuing to throw money to the contractor even though they have failed to perform and deliver on their contracts.

The most shocking aspect about this RM 6.75 billion scandal that Najib must answer is why did the Defence Ministry pay in advance RM 4.26 billion to the contractor by 31.12.2006, even though progress of work done only amounts to RM 2.87 billion. Would not the government lose RM 1.4 billion should the contractor abscond? Such behaviour is not only reckless, imprudent but also irresponsible. A full-fledged enquiry is necessary as to how RM 6.75 billion could be lost to purchase OPVs for the defence of our naval waters that would either not be delivered or not fully operational.

(10/9/2007)