Media Statement by Ngeh Koo Ham in Parliament on Thursday, 10^th November 2010:

Irregularities in the award of contracts by Rural Development Ministry costing the people at least RM500 million

The Minister of Rural Development must explain the irregularities in the award of contracts in his ministry. There are reasons to suspect the existence of rampant corrupt practices. As much as RM 500,000,000.00 could have been saved had the Ministry followed the proper practice of awarding contract to the lowest qualified tenders.

I stayed up till 10.30 pm in Parliament on Tuesday (8/11/2011) to debate and to wait for the answer from the Ministry of Rural Development with regard to the issues I had raised. I was greatly disappointed when the Deputy Minister of the Ministry refused to answer my questions.

The Rural Development Ministry is awarding 209 projects for the year 2011 and they are numbered KKLW 1/2011 - 209/2011. The Ministry has announced only the award of 129 projects. I have asked what has happened to the other 80 projects. The Deputy has refused to reply.

The projects under the ministry were given by direct negotiation, limited tender or open tender.

I have asked why projects like the Sarawak Rural Water Supply worth RM638,910,000.00 was given through direct negotiation. The Deputy has refused to give an answer. Other projects given through direct negotiation were the Sarawak Rural Water Supply recticulation system worth RM83,860,000.00 and the Sarawak Special Rural water Supply 2011/2012 project worth RM555,050,000.00.

I have informed the Deputy Minister that I have received complaints that the companies that submitted the quotations for projects under limited tender category in many cases were in fact submitted by the same person using different names. The Ministry did not invite separate independent companies to bid for the job. The Deputy Minister also refused to answer whether the allegation is true. Projects No. 9-13, 23-40, 43-46, 51-56, 60, 69-75, 82-92, 100, 101, 110, 115 116, 118-124, 131, 132, 143 and 144/2011 (68 of them) were projects awarded through limited tenders.

Although open tenders were conducted for the 68 projects as listed in the schedule hereto, all were not given to the lowest priced bidder except for one. Many of them were awarded at many times more than the lowest price tendered.

The Government lost RM403,857,592.72 for its failure to give to the lowest qualified tenders. The proper way to conduct an open tender is to first determine those qualified to bid for the job. Once the qualifying criteria for the tender have been met, the contract must be awarded to the bidder who submits the lowest bid. Such a system will save the government money and be fair to all those who have make the effort to submit the tenders.

After taking into consideration, the loss the government suffered through direct negotiation and limited tender projects, I estimate the people lose at least Rm500,000,000.00 through the improper way the above said contracts were awarded.

I call on the government to award the balance projects that have yet to be given out to be done in accordance to the abovesaid accepted proper procedure of open tender system.

Unless a satisfactory answer is forth coming from the Minister, I call on the Malaysian Anti Corruption Commission (MACC) to immediately conduct investigation as the facts show prima facie that rampant corruption exists in the award of the above said contracts.

* Ngeh Koo Ham, DAP Deputy Secretary General & MP for Beruas