Sabah lawmaker wants end to direct negotiations, questions Pan Borneo highway award

Putrajaya should stop awarding construction contracts through direct negotiations and use the open tender process, else problems of major cost increase and contractor failure will continue to arise, a Sabah DAP lawmaker said today.

Jimmy Wong (DAP-Kota Kinabalu) was referring to the Kota Kinabalu International Airport Terminal 2 project, whose contractor had to be terminated, causing the cost of the project to balloon by 250%.

Wong, in a reference to the latest Public Accounts Committee Report recommendation that the contractor be penalised for non-compliance and for causing the cost of the project to increase substantialy, said such problems were to be expected for projects given through direct negotiations instead of through an open tender process.

"Almost every contract given through direct negotiations runs into problems. This is the mother of all corruption, there is no transparency,” he said at the Parliament lobby.

Wong said even the contractor engaged to continue with the unfinished portion was appointed through direct negotiations.

It was reported yesterday that according to PAC’s report on the project in November last year, the Transport Ministry had to terminate Global Upline Sdn Bhd's contract on December 31, 2012, and pay another contractor RM194.86 million to complete the job, causing the cost of the construction job to balloon by more than 250%.

PAC started probing the project after its shoddy construction and three-year delay were highlighted in the Auditor-General’s 2012 report.

Wong, who is DAP Sabah chairman, also brought up the awarding of the construction of the Pan Borneo Highway through direct negotiations to a consortium made up of UEM and MMC, saying: "Basically, the project is being awarded to government cronies, like MMC's Tan Sri Syed Mokhtar Al-Bukhary, who is already one of the richest men in Malaysia.”

The prime minister had announced recently that the construction of the highway would be privatised and given to two companies in the name of increasing Bumiputera equity.

"Obviously to the government, Bumiputera only refers to the Malays in the peninsula, while the natives in Sabah are ignored, no equity is given to them, are the natives of Sabah and Sarawak not Bumiputera as well?" asked Wong.

He said that while he supported the plan to increase the equity of Bumiputera, he could not agree with the decision to appoint UEM and MMC for the Sabah portion of the highway.

"Why award it to these companies without informing the people of Sabah and the state goverment?

"And why is it that the Sarawak portion of the highway is being awarded to Sarawak companies, but the same treatment is not given to Sabah, resulting in the natives of Sabah to be sidelined," he said.

The RM27 billion Pan Borneo Highway stretches 1,633km across Sabah and Sarawak.

- TMI