Reminder to Cabinet not to  allow RM238 million cracked MRR2 Kepong flyover to become  another RM195 million MATRADE scandal -  a standing symbol of Third World Mentality in a land of First World Infrastructure,  still incomplete more than seven years after its original completion date in February 1997

Media Statement
by Lim Kit Siang

(Petaling Jaya, Tuesday): The Cabinet meeting tomorrow should be reminded that it should not allow the RM238 million cracked Middle Ring Road Two (MRR2) Kepong flyover to become another RM195 million MATRADE scandal -  a standing symbol of Third World Mentality in a land of First World Infrastructure,  still incomplete more than seven years after its original completion date in February 1997. 

Like the MRR2 Kepong flyover, the MATRADE was a “design and build” turnkey project of  the Public Works Department (PWD) which went terribly wrong.


The 24-storey originally RM167 million MATRADE  (Malaysian External Trade Development Corporation) building, the first of three buildings for the Trade and Investment Triangle Complex at Sri Hartamas, Kuala Lumpur meant to be a one-stop centre for trade, industry and investment, was scheduled to be completed on 10th February 1997, to be followed by the construction of MITI (Ministry  of International Trade and Industry) and MIDA (Malaysia Industrial Development Authority) Buildings.


At its hearing on 3rd September 2002, the Parliamentary  Public Accounts Committee was informed that  cracks sere detected on the floor, walls and staircase of the MATRADE Building in 1998.  Since then, there had been two “rectification” works, the first one costing RM 11.74 million and the second RM16.7 million, bringing the total cost of the building to RM194.9 million.


The original contractor, Perangsang International Sdh. Bhd, who had been given three extensions of time for completion of the project till 3rd January 1999, had refused to carry out the rectification works. However, it had  been paid RM186.8 million.  On 4th January 1999, it was imposed “Liquidated Ascertained Damages (LAD)” fine  for late delivery at RM41,750 a day – which should work out to some RM85 million, as of today, the construction of the  MATRADE Building has not been completed   although the Public Accounts Committee was assured that it would be ready for occupation by July last year.


The PAC report carried an interesting exchange between the then PAC Deputy Chairman, Datuk Haji Ahmad Husni bin Mohd Hanadzlah and the Secretary-General to MITI, Dato’ Abdul Razak Ramli, as follows;


“Naib Pengerusi: Ini (LAD)  collectable or not? This amount, is it collectable? Adakah dapat atau belum dapat lagi.


“Dato’ Abdul Razak bin Ramli: Yang Berhormat, belum didapatkan tetapi akan kita cuba dapati.


“Naib Pengerusi: So, what is the status of the company?


“Dato’ Abdul Razak bin Ramli:  Saya rasa sudah bakrap.”


For the past seven years, the imposing RM195 million MATRADE Building has stood as a symbol of shame for Malaysian construction engineering and governmental efficiency and accountability. 


The Cabinet tomorrow should ensure that the RM238 million cracked MRR2 Kepong flyover does not join the MATRADE Building as a second symbol of shame for Malaysia’s first-world infrastructure –  by taking decisive action  to give a clear accounting  as to the causes of the flyover cracks and explain the repair or rectification measures  so that the flyover could be safely  re-opened for public  use in the shortest possible time.


During the  PAC hearing on the Matrade Building in September 2002, the  PWD Deputy Director General Datuk Dr. Wahid bin Omar gave an explanation of the legal responsibilities and liabilities of a “Design and Build Turnkey Project”  which is not only pertinent to the  Matrade building but also  the MRR2 project.


Wahid said:


“Dalam kontrak design and build ini pihak yang bertanggungjawab sepenuhnya adalah seorang sahaja iaitu kontraktor utama (the main contractor). Jadi, kalau daripada segi tanggungjawab, pihak yang bertanggungjawab adalah pihak kontraktor utama. Dalam kontrak design and build  ini, kontraktor mempunyai dua tanggungjawab. Pertama, kerja-kerja mereka bentuk di mana kontraktor utama melantik konsultan untuk mererka bentuk bangunan tersebut. Yang keduanya, daripada segi project management.”


The question Malaysians want to know is why the Works Minister, Datuk Seri S. Samy Vellu is so defensive of the MRR2 contractor Bumi Hiway and consultant Maunsell, Sharma & Zakaria that he behaved more as Minister for the contractor and consultant than as Minister for 25 million Malaysians.


* Lim Kit Siang, Parliamentary Opposition Leader, Member of Parliament for Ipoh Timor & DAP National Chairman