RM10 million lost in “sick project” to build Navy college

BY EILEEN NG
DECEMBER 02, 2013

The appointment of a contractor without going through proper procedures for a RM41.46 million Malaysian Navy college training centre has resulted in a loss of RM10.2 million, in what the Auditor General described as "projek sakit" (problematic project).

The 2012 Auditor General Report found that Syarikat Ijhraa (M) Sdn Bhd, a Class B contractor, was given "special permission" to participate in a tender project in May 2009 to construct KD Pelandok in Lumut, Perak.

Of the 43 companies who took part, nine were shortlisted. Syarikat Ijhraa was chosen despite not offering the lowest price and failing to adhere to procedures.

"Syarikat Ijhraa only submitted two of the four supporting documents that were required. The two documents that were not submitted were the audited balanced sheet and supervisor's project report.

"The audited balance sheet is required to determine the tenderer's capital capabilities.

"However, the procurement board opted for Syarikat Ijhraa because the tender committee had decided that the company can still be considered despite the absence of the two documents," the report added.

Syarikat Ijhraa was awarded the project in December 2009 but was only able to complete 55% of the project by the end of its extended deadline, which was in April last year.

The company's contract was finally terminated by the Defence Ministry and JJM Integrated was appointed to complete it at a cost of RM42.93, which was RM1.47 million more than the first tender.

This was on top of the 18 interim payments totalling RM8.73 million Putrajaya had paid to Syarikat Ijhraa, bringing the total loss to RM10.2 million.

As of September this year, JJM Integrated had completed 72.5% of the project.

In its reply on September this year to the Auditor General, the Defence ministry stated that the tendering process followed the computerised evaluation system procedures set up by the Public Works Department, which required that companies taking part in the exercise submit one of the four required supporting documents. – December 2, 2013.