Press Statement
by Lim Guan Eng

(Petaling Jaya, Saturday):  The controversy surrounding the FSRC building is not limited to Bank Negara’S surprise decision to award the RM320 million contract to a little-known company, H & I Niaga Sdn Bhd. Bank Negara needs to explain why it is wasting RM 320 million of public funds to build a new FSRC when there are so many empty buildings in Kuala Lumpur to be bought and refurbished at much cheaper prices.

According to Bank Negara, the FSRC is a knowledge and training centre, a Money Museum and the Bank Negara’s art gallery. Is there any need to put so much resources into a showpiece whose real rate of return or contribution to the nation’s economy, corporate governance and accountability, regulation of the banking system for the benefit of ordinary consumers is doubtful at best and counter-productive at worst.

On Sept 16 Bank Negara said the successful tender of the FSRC was selected through a rigorous evaluation process based on competitive pricing and expected to be completed in 2007. In a statement on Oct 17, the central bank said the criteria to award the contract included the tender price, track record, financial capability, quality as well as technical and commercial capabilities of the team that was put together to complete the project.  

To-date, Bank Negara has not explained the reasons behind the selection of the company over other big time contractors including publicly listed companies such as  Ahmad Zaki Resources Bhd, PECD Bhd, UEM Builders Bhd and Ranhill Bhd or practiced transparency by stating the tender prices bid? Such secrecy is also practiced by H&I Niaga Sdn Bhd.

Apart from the company being owned by one Amerudin Ismail (two million shares) and Ismail Mohd Hashim (three million shares), little is known about the company. The company has not filed profit and loss accounts with the Companies Commission of Malaysia since 2002. Its last submitted accounts for the financial year ended Dec 31, 2001, which showed that it had bank charges of more than RM40 million, while its net profit was RM14,500. How could Bank Negara award a RM 320 million contract to a company that had not submitted its profit and loss accounts for the past three years of 2002, 2003 and 2004 to the Companies Commission Malaysia?

In reply H & I Niaga cited accounting and computer problems in the delay in submitting profit and loss accounts and has submitted the 2002 and 2003 accounts. With regard to the payment of levy to the Construction Industry Development Board (CIDB), H & I Niaga explained that the matter will be resolve before October 25.

Such an explanation may be acceptable to H & I Niaga Sdn Bhd and Bank Negara but not to the public who has a right to know why a RM 320 million contract is entrusted to a company that faces such problems and not to other companies without such problems. How can the public have confidence that the FSRC building will be completed when H & I Niaga can not even get its financial accounts in an orderly and timely manner?

Most important of all, Bank Negara must explain and justify the rationale and benefits to the public of spending RM 320 million on building a new FSRC, which is essentially a conference centre and art museum, and NOT choose the cheaper option of buying over the many empty buildings around Kuala Lumpur.

(22/10/2005)