BN must address three audit issues | Free Malaysia Today

BN must address three audit issues

Athi Shankar | October 22, 2012

DAP wants the government to explain three issues, which include directly negotiated government contracts, writting off government and IWK licences.

GEORGE TOWN: DAP has demanded the federal government to address and explain three major issues highlighted in the Auditor-General’s Report 2011 to ensure the public is not shortchanged.

Party secretary-general Lim Guan Eng noted that one was on several directly negotiated massive government contracts and projects that had affected public trust

Another major issue was the massive write-off of government loans to Perwaja Terengganu Sdn Bhd, amounting to a whopping RM1.626 billion.

The third, he said, involved the exemption of licence fees for Indah Water Konsortium Sdn Bhd (IWK) amounting to RM1,371 million.

“Barisan Nasional has to be changed if it continues to dismiss the AG Report by refusing to explain the mismanagement, waste and abuses costing tens of billions of ringgit,” said Lim.

The Penang chief minister cited the directly-negotiated RM12.49 billion Ipoh-Padang Besar double-tracking project, which was delayed twice and had incurred RM3.6 billion extra cost, as a glaring example.

He pointed out that majority of military quarters built by the Defence Ministry were awarded by direct negotiation and its cost nearly doubled to RM3.2 billion with visible defects of collapsed ceilings and leaking sewer pipes.

He urged Defence Minister Ahmad Zahid Hamidi to explain why he waited until the AG Report had exposed the shoddy and defective work to lodge a complaint with the Construction Industry Development Board (CIDB).

Moreover, he argued that the Defence Ministry should have acted to punish the contractor instead of passing the buck to CIDB, which had lesser powers.

He demanded Zahid to list down his ministry’s steps to detect such abuses, rectify defects and punish contractors and officials responsible.

He demanded a ministerial explanation on why the federal government waived penalties worth RM87.12 million despite poor and defective performance that flouted contractual obligations.

“Clearly, the entire internal control mechansim within the ministry comprising the monitoring, analysing and auditing of projects has failed.

“Military personnel have been shortchanged in another crony project of BN benefiting contractors at public expense,” he added.

Failure to recover loan arrears

Lim also chided the 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 RM3.64 million put up in Indonesia via direct negotiation, a case currently investigated by MACC.

The AG Report also mentioned state-owned company Sarawak Coal Resources Sdn Bhd’s contracts for extraction and transportation of coal ore in Mukah for RM923.03 million that was awarded to four firms through direct negotiations.

“No wonder Sarawak Coal Resources Sdn Bhd is recording losses,” jibed Lim.

The AG Report had highlighted 42 loans given out by the federal government to companies having arrears for a period between one and 17 years, amounting to RM 3,328 million, which was an 18.7% increase from RM2,805 million in 2010.

Lim chided the federal government for failing to take any action to recover the loan arrears and for writing off Perwaja’s RM 1,626 million loans for a period of 16 years between 2011 and 2027.

He questioned the rationale behind the huge write-off when public-listed Perwaja was making profits, arguing that it gave the impression of cronies getting special treatment at the expense of 28 million Malaysians.

“Again why cronies have their loans written off but not ordinary Malaysians who have to pay the last cent or else be sued by banks?” he asked.

On the third issue, he noted that IWK had applied to the environment department (DOE) for 3,290 licenses between 2008 and 2011 to violate environmental standards in disposal of toxic wastes.

Upon approval, IWK was required to pay RM1,554 million for license fees as at end of 2011
But due to the Cabinet’s exemption of RM 1,371 millon on May 21, 2010, IWK now needed only to pay RM183 million.

“Why did Cabinet give IWK this huge exemption at the expense of the environment and without any benefit to Malaysians?” asked Lim.

Also read:
Audit Report 2011: Nothing has changed