Comments on the Auditor General’s 2008 Report

In line with the controversy about the recent Auditor General’s 2008 Report, TRANSIT provides you with these statements:

1. Klang MP Charles Santiago comments on the cost overrun in the Rawang-Ipoh Double Tracking and Electrification Project

Press Statement by Member of Parliament Klang Charles Santiago in Parliament on 2nd Nov 2009

Whatever happened to accountability? We thought the Port Klang Free Trade Zone (PKFZ) scandal was the last of the financial fraud running into billions of ringgit. Now, the Auditor General’s report has indicated that there was a major over run to the tune of more than RM 1.3 billion in the 179 km rail double tracking project between Rawang – Ipoh.

That is not the end of the story. Instead it’s a tale of grand sweep as it involves the Chief Judge of the country, Zaki Tun Azmi. He is the Chairman and biggest shareholder in Emrail Sdn Bhd, one of the contractors involved in the project. Zaki was appointed to the top judicial position on 21st October, 2008.

Zaki, also well known as an UMNO lawyer, was still speaking on behalf of Emrail on 21st April 2007. Subsequently he was appointed as the Federal Court judge on 5th Sept 2007 and made the Chief Judge on 21st Oct 2008.

He was quoted by Bernama saying, “We have completed the Rawang-Ipoh project to the satisfaction of the government. Bearing in mind that Emrail is the only Bumiputera-owned tracking company in Malaysia, we hope the government will consider us for tracking jobs for the Ipoh-Padang Besar as well as Seremban-Gemas projects,”.

According to the Auditor General’s report for 2009, Emrail Sdn Bhd was the most inefficient of the four subcontractors as it completed only 56.9 percent of the project given the deadline of 10th Dec 2003.

The government might now have to absorb part of the RM 1.14 billion loss brought about by delays in implementation, not keeping to the standards imposed in the infrastructural development leading to the infrastructure not being fully optimised and the procurement of extra equipment and coaches.

We have the assurance from Chairman of the Parliament’s Public Accounts Committee (PAC), Azmi Khalid, that the body would investigate the Transport Minister and contractors involved in this financial mess.

Before the PAC starts its investigations, the public need to be informed of the people who are involved in this project. Allocations made to the contractors, names of politicians involved, terms in which contracts were awarded and concrete reasons for the delay must be made public.

The Transport Ministry and government are in a limbo as the project has been warped with irregularities since its inception. The dual tracking system, which was supposed to be completed in 2002, was pushed back till 2007.

Without a doubt we could conclude that the double tracking project joins the ranks of PKFZ as another mega financial scandal prompted by greed, cronyism, sophisticated potpourri of business and politics and devastating mismanagement.

Both mega projects have already cost the nation approximately RM14 billion or every Malaysian, RM 520. This does not include losses due to direct negotiations of contracts estimated at RM 28 billion as revealed by a Star newspaper probe.

Stern action and corresponding punishment is desperately needed to regain the confidence of the public and investors.

Hoping that problems would disappear if they are ignored long enough would simply not work, anymore.

Therefore, I urge the PAC in its meeting next week to support Auditor General Tan Sri Ambrin Buang suggestion that the Transport Ministry fine DRB-Hicom Bhd RM80.88 million (RM164,727 a day) for its failure to complete the Rawang-Ipoh electrified double tracking project on time

Furthermore, I urge the PAC Chairman to summon Zaki, former Transport Minister Chan Kong Choy, as well as DRB-Hicom and its subcontractors to give explanations to the Parliament. The Malaysian Anti-Corruption Commission (MACC) should focus its effort in investigating the scandalous federal leakage that rather than scheme with UMNO politicians to overthrow the Pakatan Rakyat-led Selangor government.

Charles Santiago
Member of Parliament, Klang
016 626 7797

2. Moaz Yusuf Ahmad from TRANSIT comments on Prasarana’s past procurement of buses and upcoming 400 buses.

Prasarana’s bus tender process needs to be more open

The Association for the Improvement of Mass-Transit (Transit) notes that public transport holding company Prasarana (Syarikat Prasarana Negara Berhad) has placed a tender announcement for the purchase of 400 chassis for new CKD (completely knocked-down) buses to be operated on by their subsidiary RapidKL Sdn Bhd.

The tender announcement read as follows:

‘Manufacture, supply, delivery, testing, commissioning, warranty, repair and maintenance of four hundred (400) units of twelve (12) metre completely knocked-down (CKD) diesel city buses for RapidKL’

At present, we do not know if the tender for 400 CKD buses (specifically for their chassis) is for an expansion of services or a replacement for some of the buses that were purchased for RapidKL between 2005-2009.

In any case, the timing of the tender is interesting, given the release of the Auditor-General’s 2008 Report which found problems with the purchase of RapidKL buses in 2007-2008 that were of low quality.

We are also concerned because these low-quality buses were purchased to replace buses (operated by IntraKota) that were scrapped (left to rot?) by Prasarana in 2005-2006.

In addition, it appears that Scomi Coach Sdn Bhd quietly received a contract to refurbish some of the China-made buses. This issue was profiled by the local media, bloggers and even by former prime minister Dr Mahathir Mohamad.

According to a statement on Prasarana’s website, these former IntraKota buses were incapable of being salvaged when they were turned over to Prasarana.

We at Transit expect that buses should be able to last at least 10-12 years without requiring significant maintenance or overhaul. The fact that Prasarana has sent buses less than five years old to the scrap heap already, and may do so again in the near future, is of great concern to us.

We also find it especially interesting that, according to an industry source, the tender was actually called earlier this year (we do not know which company was successful) and the tender announcement last week is actually a ‘surprise’ re-tender!

In light of the Auditor-General’s 2008 Report, the concerns about the procurement of buses and bus depots, issues with the interior design of the RapidKL buses, and the announcement of the 2010 budget, the Association for the Improvement of Mass-Transit (Transit) calls on Prasarana to open up the tender process for greater scrutiny from the public, the Auditor-General’s Office and interested ‘wakil rakyat’.

We also believe that it is vital to have feedback from public transport users on the design and interior features of buses. The end user must be consulted about seat design, handholds, accessibility features (including audio and visual announcements) and other features of the buses.

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