Wednesday, September 3, 2008

Navy overspent RM114 mil tax payer money on jetty HQ

Source : Malaysiakini

The Royal Malaysian Navy (TLDM) overspent by RM114.22 million when building its jetty headquarters in Sabah, according to the Auditor-General's Report 2007.

The construction costs of the project, located in Wilayah Laut Dua, Teluk Sapangar, exceeded the navy's initial budget of RM533.9 million.

The report described the project as a poorly planned and managed one, that was completed only 44-months after the original target date of Apr 15, 2004.

According to Auditor-General Ambrin Buang, the delay was caused mostly by interfacing work done by contractors - Ekran Berhad and Muhibah LTAT-JV.

The report also stated that the contractors had made a hasty decision, pushing through the project that resulted in flawed design plans.

It further cited 14 variation orders worth RM38.36 million that pushed up costs.

"Other factors that contributed to this poor planning were squatters and cemetery relocation issues together with the problems regarding water and electricity supply," said the AG.

The report also pointed out other weaknesses where construction work was not executed according to specification, resulting in defects that have yet to be fixed.

Ekran must settle fine

Putting the blame on both contractors, the AG called on the defence ministry to act swiftly in getting the contractors to repair the defects before the warranty period expires.

malaysia military navy teluk sepanggar naval base sabah 030908 02Muhibah LTAT-JV and Ekran Berhad have until Nov 28, 2009 and Dec 13, 2009 respectively to complete the repairs.

While it did not specify a deadline, the AG also advised the ministry to instruct Ekran Berhad to pay up RM1.42 million in fines for delaying the project.

According to the report, the project's consultant was also to blame for lack of supervision that resulted in poor quality construction materials that were not up to framework standard.

The AG also advised the defence ministry to ensure the consultant submitted all drawings, technical information, catalogues, operation manual, a list of spare parts and maintenance schedule regarding the project.

CIQ complex in JB

The AG report also revealed the construction of the RM1.27 billion Custom, Immigration and Quarantine building at Bukit Chagar, Johor Bahru did not undergo an open tender process.

According to the report, the contractor was directly appointed by the federal Works Department.

Apart from that, it said the project deadline was extended by 334 days from the targeted Oct 31, 2005 .

One of the factors for the delay was due to getting pipe transfer approval from Public Utilities Board, Singapore and also due to the cancellation of the second Johor-Singapore bridge.

The AG recommeded the finance ministry to instruct the assigned contractor to fix the defects before the warranty period expires.

The report also suggested that for a design and build project like this one, it was important that the contract included a clause stipulating the contractor's responsibility in conducting maintenance within an appropriate time-frame to prevent future delays.