Why was a sum of RM150m approved for a bridge project with an estimated cost of RM100m to RM110m?

By Chong Chieng Jen

In the press statement issued by the Work’s Ministry on 11-2-2015, it claims that the ministry’s Value Management Lab had in June, 2011, estimated that the cost for building the Batang Samarahan bridge is between RM100 – 110 million.

Taking the statement as it is, it reveals some serious mal-practices at the highest level of the Works Ministry and/or the Finance Ministry, which smacks of corruption.

Chong Chieng Jen

Reading the press statement, the first question that comes to my mind is:

“              With an estimate of only RM100 – 110 million by the Value Management Lab of the Works Ministry for the project, why was a sum of RM150 million approved for the project with only some hand-picked contractors invited to tender for the project?”

To allocate a sum of RM150 million for the said project is a blatant disregard of the estimate of costs by the JKR’s Value Management Lab.  The Ministry of Works and the Ministry of Finance must have known that the estimated costs was only RM100 – 110 million, yet a sum of  RM150 million was approved for the said project so that the contractors invited to tender therefor will make a profit of about RM50 million. 

Who are the people approving the allocation? Are they the Ministers or high-ranking officers in the Ministry of Works or the Ministry of Finance or both? Who are these contractors?

DAP calls on the MACC to launch an immediate investigation on the following:

1.            With the estimated cost of only RM100 – 110 million for the said Batang Samarahan bridge, who is the officer or the minister involved in the approval of RM150 million for the project (50% over the estimated cost)?

2.            Who are the contractors specifically “invited” by the ministry to submit tender via the “invited tender” process?

3.            What is the relationship between the minister and/or officer involved and the contractors invited to tender?

4.            Is it the normal practice of the Government to approve an allocation of a sum 50% more than the estimated costs and thereafter to invite some specific contractors to tender so the contractor can make 50% profit from the project?

Even with the 50% profits, it seems that those contractors invited to tender for the Batang Samarahan bridge project were still not satisfied and all of them submitted the bids for more than RM200 million, wishing to make a 100% profits out of the project. 

More importantly, the Works Ministry did not reject their offers, but instead re-evaluate the said project.  It seems that a lager allocation of fund was sought.  Had there not been pressure by the DAP, RM200 million would have been approved for the project, out of which RM100 million of public fund would have been wasted.

At that critical time which is sometime in April 2014, I, as the Chairman of DAP Sarawak, tuned our eyes on the JKR tender process, created media attention and raised questions in Parliament on the JKR tender process.  It was under the intense pressure from the DAP that 2 months later on 20th June 2014, the Ministry of Finance cancelled the “invited tender” and approved the project to be carried out via open tender.