BN has to be changed if they continue to dismiss the Auditor-General’s Report

Defence Minister Datuk Seri Ahmad Zahid Hamidi must explain why he has to wait until the 2011 Auditor-General Report exposed shoddy and defective work done of family homes of the military before lodging a complaint with the Construction Industry Development Board (CIDB). Clearly the entire internal control mechansim within the Defence Ministry comprising the monitoring, analyzing and auditing of projects has failed.

Should not the Ministry act instead of delegating it to the CIDB, when CIDB have lesser powers than the Defence Ministry to punish the contractor concerned? Zahid should list out the steps taken by the Defence Ministry to ensure that such abuses can be detected, immediate steps taken to rectify the defects and stern action to punish the contractors and officials who failed to monitor properly.

Zahid said that the ministry would not compromise on excessive profiteering by constractors who built not according to specifications. Then he should explain why despite such poor and defective performance, the Federal government still waived penalties worth RM 87.12 million for failure to meet contractual obligations. Clearly military personnel have been shortchanged as this is another crony project of BN benefiting contractors at the expense of the public.

I am not surprised that there was no mention by MCA leaders at the MCA General Assembly of mismanagement, abuses and and waste listed in the 2011 Auditor-General’s Report. After all MCA President Datuk Seri Dr Chua Soi Lek had dismissed the negative Auditor-General’s Report as having no impact on BN’s support in the next general election.

To ensure that the public is not shortchanged and that the BN government is serious about addressing the problems mentioned in the Auditor-General’s Report, 3 issues must be addressed.The first issue revealed by the Auditor-General’s Report relates to several massive government contracts and projects that were directly negotiated instead of open competitive tenders, affecting public trust.

The most glaring example was the directly-negotiated RM 12.49 billion Ipoh-Padang Besar double-tracking project that was delayed twice and has incurred an additional RM3.6 billion in costs. The majority of the military quarters projects were also awarded by direct negotiation. Military family quarters built by the Defence Ministry saw costs nearly double to RM3.2 billion with defects such as collapsed ceilings and leaking sewer pipes.

Other examples include 1,000 brochure racks worth RM1.95 million for Visit Malaysia Year 2007 bought through direct negotiation by the Malaysian Tourism Promotion Board without the Finance Ministry’s approval, and the five billboards worth RM 3.64 million that it put up in Indonesia via direct negotiation that are being investigated by the Malaysian Anti-Corruption Commission (MACC).

The latest revelation by the Auditor-General’s Report is in Sarawak where a state-owned company, Sarawak Coal Resources Sdn Bhd awarded contracts for the extraction and transportation of coal ore in Mukah for RM923.03 million to four firms through direct negotiations. No wonder Sarawak Coal Resources Sdn Bhd is recording losses.

The second issue relates to the massive write-off of government loans given to Perwaja Terengganu Sdn Bhd that were unpaid over the last 14-17 years amounting RM 1,626 million. The 2011 Auditor-General’s Report had highlighted that 42 loans given out by the Federal government to companies had loan arrears between 1 to 17 years amounting to a huge sum of RM 3,328 million, an increase of 18.7% compared to RM 2,805 million in 2010.

No action was taken by the Federal government to recover these loan arrears apart from writing off Perwaja’s RM 1,626 million loans over a period of 16 years from 2011 to 2027. What is the rationale for such a huge write-off of loans when Perwaja is now listed on Bursa Malaysia and is making profits?

Writing off huge loans for one company like Perwaja gives a negative impression that cronies get special treatment at the expense of 28 million Malaysians. Again why should cronies have their loans written off but not ordinary Malaysians who have to pay the last cent or else be sued by banks?

The third issue relates to the exemption of fees for license to contravene given to Indah Water Konsortium Sdn Bhd(IWK) amounting to RM 1,371 million. IWK had applied to the Department of Environment for 3,290 licenses to contravene from 2008-2011 to violate environmental standards in disposal of toxic wastes.

Upon approval the license fees required to be paid by IWK amounted to RM1,554 million as at end 2011. However Cabinet gave an exemption of RM 1,371 millon on 21.5.2010, resulting in IWK only needing to pay the remainder RM183 million. Why did Cabinet give IWK this huge exemption at the expense of the environment and without any benefit to Malaysians?

BN has to be changed if they continue to dismiss the Auditor-General’s Report by refusing to explain the mismanagement, waste and abuses costing Malaysian tens of billions of ringgit annually.

Lim Guan Eng DAP Secretary General & Penang Chief Minister