HDC, SEDC Cited For Massive Mismanagement In AG’s Report; Bring In MACC

STATEMENT: The Malaysian Anti Corruption Commission (MACC) should immediately investigate suspicious payments involving two state statutory bodies in Sarawak.

We were shocked to read the report published by the 2016 Auditor-General (AG) Report which rated as ‘unsatisfactory’ relating to suspicious payments and mismanagement of public funds by two state statutory bodies in Sarawak.

1. First is the Sarawak Housing Development Corporation (HDC). It was reported that the HDC paid out RM2.88 million to two contractors for non-existent repainting job of 12 public housing units. Some procurement made by HDC did not abide by provisions of the Financial Procedure Act and other procurement rules.

This shows that payments being made without receiving the goods and services. How HDC can pay the contractors the amount of money when they didn’t even carry out the work? Who is the person responsible for the payment?

On the other cases which related to HDC, the report found that the payment of RM16.8 million for Package 1 and Package 2 of the Jalan Utama upgrading project in Sibu were made in advance without the necessary authorisation. The advance payment resulted in the Sarawak government being knocked out with RM1.77 million in interest as a result of late payments to HDC’s partner HDCam Sdn. Bhd.

The payment amounting to RM33.40 million were made to suppliers without being verified by the officer who had the authority to do so, and six payment vouchers amounting of RM20.77 million were also not supported by Payment Certificates.

If the payment is made to suppliers without the verification of the officer-in-charge, then who is the person responsible for the payment? Why is there no full documentation made to support the payments? Were there any (inside) links with the suppliers?

Mordi, Abdul Aziz Isa and Dr Kelvin Yii in Kuching on Friday.

2. Second is the Sarawak Economic Development Corporation (SEDC). It was reported that the construction cost of the Riverside Majestic Hotel which belongs to SEDC’s subsidiary company Sejadu Sdn Bhd had increased by 13.5% (RM8.07 million) from the original cost. The original value of the 24-month project was RM59.89 million and was supposed to be completed in June 2014.

Despite being given seven extensions amounting to 758 days or 25 months, the construction project is yet to be completed. Why was there a three-year delay in the project? How come there are no Liquidated and Ascertained Damages (LAD) charges imposed on the contractor for the work delay?

LAD is a provision for the contractor to pay liquidated damages to the client in the event that the contract was breached. In this case, why weren’t the LAD charges imposed on the contractor, which clearly failed to achieve practical completion, by the date set out in the contract?

How long does it take to complete the 18-storey building? It has been more than 5 years since June 24, 2012 and yet the construction of the hotel is far from the completion schedule. With further delay and no LAD charges, something is wrong here and the public wants to know how their tax money is being inefficiently managed by the state government.

Both cases mentioned in the AG’s report happeneds when Abang Johari Openg was the Minister of Housing while Datuk Talip Zulpilip was the Chairman of SEDC. Now, the former has become the Chief Minister while the latter has been appointed as Minister in the Chief Minister’s Office (Integrity and Ombudsman).

Both of them owe the public, especially Sarawakians, an explanation.

This is a clear-cut case on mismanagement of public funds. It shows how bad the country is being run and dried up when our economy is at the verge of bankruptcy. What do we expect when ‘crocodiles’ work together with ‘sharks’? Nothing will turn our good from these chaps. This is why the people have losing their trust and faith in our incompetent government to combat corruption and abuse of power.

With all these findings, will the government take any action? Or will they just close the case like they usually do? I scratch you, you scratch me. It is not wrong to say that a fish rots from the head. This hanky-panky bleeds not just the country but the masses that have to bear the pain and cost. The rakyat keeps paying the taxes while our government arbitrarily misuses public funds (that benefit) their cronies.

We reckon that such mismanagement of public funds would not have happened if these two state statutory bodies gave out the project through ‘open tender’.

Furthermore, we must stress here that all the weaknesses and mismanagement of public funds by HDC and SEDC that were pointed out in the AG’s report should not just be looked into and rectified by the MACC; it must also be scrutinised and investigated (and the culprits brought to book).

As such, MACC’s newly set-up special team should immediately come forward to open an investigation on the possibility of corruption and abuse of power involving the suspicious payments and mismanagement of public funds by the HDC, HDCam Sdn Bhd, SEDC and Sejadu Sdn Bhd – as indicated in the AG’s report – without any delay.

Abdul Aziz Isa, Mordi Bimol and Dr Kelvin Yii are Special Assistants to Chong Chieng Jen, DAP Sarawak chairman