Call on Abdullah to suspend award of the unfinished portion of Ipoh-Rawang double tracking contract to UEM for RM1.1 billion and explain the reason for rejection of DRM Hicom’s offer to complete the project if its RM700 million variation order claims are met – which would mean a saving of at least RM400 million
Media Conference Statement (2)
by Lim Kit Siang
(Parliament, Tuesday): Works Minister Datuk Seri S. Samy Vellu’s list of 215 “troubled” projects did not include one “mega-trouble project” (although this is not under his purview) – the RM4.6 billion Ipoh-Rawang electrified double tracking project, originally planned to be completed by 2002, with completion date kept being pushed back to 2003, 2004, 2005, 2006 and now 2007.
The Ipoh-Rawang double tracking project is made up of two packages: -
When he became Transport Minister, Datuk Chan Kong Choy said in September 2003 that he did not want any more delay in the Ipoh-Rawang double tracking project and announced a new completion date for the project – before October 2005 for the new train service to start in early 2006.
He announced the formation of a steering committee headed by the Transport Ministry secretary-general Datuk Zaharah Shaari which will meet with contractors on a weekly basis to fast-track the completion of the project.
This high-powered fast-track committee, however, had not met for almost a year, with work almost at a standstill as the whole project has been bogged down by the dispute over the variation orders claims amounting to some RM700 million by the lead contractor for the civil and structural works, DRB Hicom Bhd. – which were made on the advice and instructions from several government agencies including the Ministry of Transport but without the written approvals from the Ministry of Finance.
According to independent consultant MOTT MacDonald Ltd, 82 per cent of the civil infrastructure project has been completed.
I understand that the Ministry of Finance has terminated the contract of DRB-Hicom and awarded the unfinished portion of the Ipoh-Rawang double tracking project to UEM Group Bhd, with DRB Hicom directed to vacate all its work sites along the Ipoh-Rawang stretch by Friday.
Without going into the merits or otherwise of the dispute over DRB-Hicom’s RM700 million variation order claims, it is a matter of grave public concern that the Finance Ministry has awarded the contract for the unfinished portion of the Ipoh-Rawang double tracking to UEM for RM1.1 billion, when DRB-Hicom has undertaken to complete the project if the RM700 million variation order claims are met – which would involve a saving of RM400 million. Furthermore, what guarantee is there that there would not be further delays as well as fresh variation order claims when UEM takes over as the lead contractor for the unfinished portion of the double tracking.
I call on the Prime Minister, Datuk Seri Abdullah Ahmad Badawi, who is also Finance Minister, to suspend the award of the unfinished portion of Ipoh-Rawang double tracking contract to UEM for RM1.1 billion and explain the rejection of DRB Hicom’s offer to complete the project if its RM700 million variation order claims are met – which would mean a saving of at least RM400 million if not more.
Abdullah should personally intervene in this matter before he leaves for his official visit to Iran tomorrow, as there is a possibility that the Ipoh-Rawang double tracking contract, if not handled properly, may blow up to be the first mega financial scandal of his premiership, placing his commitment to “good governance” under a cloud.
* Lim Kit Siang,
Parliamentary Opposition Leader, MP for Ipoh Timur & DAP
Central Policy and Strategic Planning Commission
Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman