Explain cost overrun claims on double-tracking project, Pua tells Putrajaya
KUALA LUMPUR, May 22 — DAP MP Tony Pua today demanded clarification from the Transport Ministry on reports claiming that the Ipoh-Padang Besar double-tracking project had incurred cost overruns of up to RM1.5 billion.
The Petaling Jaya Utara MP suggested that the Auditor-General conduct an early probe on the RM12.49 billion project, saying weaknesses could then be rectified and recommendations implemented before a scandal like the RM12.5 billion Port Klang Free Zone (PKFZ) project is repeated.
“We should not wait until the projects are completed at substantially higher costs and delays before the Auditor-General starts his audit,” he said in a statement.
Pua (picture) was citing a report in the Business Times yesterday which said that joint-venture group MMC-Gamuda was due to submit a RM1.5 billion variation order to the government for cost overruns in the Ipoh-Padang Besar Electrified Double Track (EDTP).
The report had quoted an unnamed source as claiming that “the civil works are 70 per cent completed, and the systems side, only 30 per cent. There are still land issues and other unresolved matters on MMC-Gamuda JV’s part”.
MMC-Gamuda had however refuted the report despite admitting that it will be seeking claims for “expenses and losses” caused by the government.
According to Pua, project director Datuk Paul Ha had said that “MMC-Gamuda’s claim will be in accordance with the terms as stated in our contract, but it is too early at this point to even determine the amount and it will be nowhere near RM1.5 billion as stated in the New Straits Times”.
But despite this, Pua expressed worry that the additional claims, if worth up to RM1.5 billion, which is a 12 per cent increase from the total project’s cost, would go the way of the EDTP’s Ipoh-Rawang segment.
That stretch of the EDTP, he said, had increased from RM4.2 billion to RM6.6 billion, or by more than 50 per cent.
“The A-G has also in his 2009 report criticised the management of the project which involved a mid-term change of contractors — from DRB-Hicom which could not complete the work to MMC-Gamuda.
“Despite failing to complete work agreed in the contractual terms, the government had paid the DRB-Hicom consortium RM425 million as compensation or settlement for the termination of the agreement,” Pua said.
He pointed out that even the A-G had questioned why the government had not claimed liquidated and ascertained damages (LAD) from DRB-Hicom for failing to carry out its obligations in time.
The fiasco, he said, had also resulted in a delay of the Ipoh-Rawang project by more than five years.
“Therefore to prevent another repeat of the Ipoh-Rawang scandal, the transport minister must explain the truth behind the above contradictory claims to ensure that the contractor, MMC-Gamuda, is not attempting to conceal a possible variation order as an excessive ‘expenses and losses’ claim against the government.
“Datuk Seri Kong Cho Ha must view the matter seriously to prevent it from becoming the second big-cost overrun scandal under his watch after the new low-cost airport, KLIA2, saw its construction cost balloon from an initial RM1.7 billion to a whopping RM3.9 billion,” he said.