The “Selected Tender” Process in the construction of Jalan Song/Sungai Yong, Phase 3, Kapit, Pakej B (CH.5+460 to CH.17+560) road construction project Cost the Tax-payer at least an extra RM20 milliion.

In early February, 2014, an open tender was initially called for the construction and completion of the said Pakej B, Jalan Song/Sg.Yong, Kapit project.  Newspaper advertisement inviting contractors to submit their tenders were published.  A total of 53 contractors submitted their tenders for the said project. 

Taking away the highest and the lowest tender prices, the tender prices submitted by the remainder 51 contractors ranged from RM82,857,153 to RM141,290,530.

Unknown to the contractors who have submitted the tenders, by a letter dated 19-2-2014, the Ministry of Finance cancelled the open tender process and applied the “selected tender” process whereby only 10 contractors were selected by the Ministry of Finance.

The reasons given by the Ministry for the secret conversion of the open tender to selected tender process were that the project needed to be carried out urgently and by contractors with strong financial and technical standing.

Despite the so-called “urgency” of the matter, the contract was finally awarded to one of the 10 selected companies, ie. Impian Zaman SdnBhd on 17-11-2014, 8 months after the supposed closing date of the cancelled “open tender” process.  The company was awarded the said Pakej B Jalan Song/Sg Yong, Kapit project at the price of RM119,830,000.00.

There are three (3) glaring improprieties of the award of this Pakej B, Jalan Song, Kapit project:

1.       There are 17 contractors who submitted tender prices below RM100,000,000 and 15 more contractors who submitted tender prices below RM119,800,000 for the project.  The mean (average) tender prices of these 32 contractors is about RM99,000,000, which is RM20 million less than the award price for Impian Zaman Sdn Bhd.  Why did the government want to pay an extra RM20 million more for the said project?

2.       Amongst these 32 contractors, there are also established contractors, and even a public listed company.  Why were these contractors excluded from the “selected list”?

3.       Impian Zaman has only RM1,000,000 paid-up capital.  It is also a exempt private company where there is no need to file its financial account with the Companies Commission of Malaysia.  How can a company with only a paid up capital of RM1,000,000 paid-up capital undertake a RM119,830,000 construction work which is more than 100 times its paid-up capital.

The bottom line is:  At this crony price of RM119,830,000 for the said Pakej B Jalan Song/Sg Yong, Kapit project, the project costs has escalated by 20% (or RM20 million) compared to if the project were to be awarded by open tender.  At least RM20 million of the tax-payer’s money has just gone to enrich the BN crony.

It is most unfair to the People that when Najib is talking about cutting subsidy for the people and increasing tax on the people to support the Government’s coffer, his ministry is still dishing out lucrative and over-priced contracts for the benefits of the BN cronies at the expense of the people.

At this juncture, the country and its people are facing one of the toughest times since the 1997 currency crisis because of:
1.       A more than 40% drop in international oil prices reducing the overall Government’s revenue by approximately 15%;
2.       Government debt has increased to an unprecedented level of RM569 billion;
3.       The Ringgit has depreciated to RM3.5 to US$1 and RM2.68 to S$1 and is expected to continue depreciate;
4.       The recently announced illicit money outflow from Malaysia is still at an alarming level RM171.1 billion for the year 2012. 
In per capita sense, our illicit money outflow tops the world: China (US$183.91 per capita), India (US$47.65 per capita), Russia (US$856.16 per capita), Mexica (US$774.81 per capita), Malaysia (US$1,646.36 per capita);
5.       The Government has reduced subsidy on many essential goods for the people; and
6.       The Government is introducing the GST to tax the poor to increase its revenue.

We DAP has, earlier on, lodged a report on the secretive conversion of “open tender” to “selected tender” of this project with the Malaysian Anti-Corruption Commission, but the MACC refuses to investigate.  It is proof that the MACC is more of a figurative “lapdog” of Najib than an enforcement body to inculcate integrity in the system.  That is why it will not investigate the Ministry which Najib heads even where there is glaring improprieties.

The people must remember, for every Ringgit of tax money that we pay, at least 20% has gone to enrich the BN cronies.  This has gone on for decades and will continue so long as BN is the government.  At the end, the Rakyat will be forced to pay more tax to finance the financial interests of these cronies.

Chong Chieng Jen
MP for Bandar Kuching
ADUN Kota Sentosa