ETALING JAYA: The government had to bear the cost of more than RM80 million for development projects for the Royal Malaysian Police (PDRM), which were either stalled or cancelled outright.
According to the 2010 Auditor-General’s Report, a total of 44 PDRM projects were stalled and 11 were stopped due to several reasons including cost increases and sudden changes in the projects’ scope.
“On May 30, 2008, the finance ministry approved 129 projects at a cost of RM9.24 billion. In line with that, PBLT (Pembinaan BLT Sdn Bhd) had issued letters of intent to appoint consultants,” said the report.
However, on Oct 28, 2008, the finance ministry had limited the project costs to only RM8 billion and only 74 projects would be implemented.
“Due to this change in project plans, PBLT and the government have to bear the fees of consultants totalling RM80 million for 44 projects which were stalled and RM171,672 for 11 projects which were cancelled,” said the report.
PBLT, established in July 2005, is a special purpose vehicle under the Finance Ministry Inc to undertake development projects for PDRM. These projects – quarters, police stations, headquarters and police camps – are “fast-tracked” via a “build, lease, and transfer” concept.
The report said that as of May 2011, PBLT has paid RM59.26 million to the contractors (for the change in plans). However, it added said that PBLT had taken “appropriate” actions in lessening the costs of the stalled projects.
The report also noted that for projects implemented via direct tender, there were cases where the contract costs, recommended by the finance ministry, were higher than the costs recommended by the PBLT’s cost negotiations committee.
The auditors found seven such projects out of nine where this had occurred.
The report also cited cases where the finance ministry had increased the original finalised costs. “One project was the Sabah IPK Package 1 where the original price was RM166.29 million and was hiked to RM174 million,” said the report.
Another was the Kem PGA Simpang Renggam (from RM45 million to RM53 million) and Maktab Teknik Bakri, Muar, Johor (from RM145 million to RM160million).
The report said the explanation from the ministry was that the hike in costs was due to requests from the contractor who cited the increase in prices of fuel, steel and other materials.
Among others, the report also pointed out several other weaknesses in the implementation and planning of the projects:
- 18 out of 20 project underwent time overrun;
- extension of time certificates were approved late;
- final certificate of employment for contractors not prepared; and
- Delay in the signing of agreements.
The audit between May and Oct 2010 found that on the whole, the financial performance and management as well as corporate administration of PBLT have been “satisfactory”.
The report recommended that the finance ministry ensure that plans were well prepared before projects were carried out to avoid wasting public funds.
