Friday, January 14, 2011

Kong Cho Ha's Height of Ministerial Irresponsibility

Transport Minister Datuk Seri Kong Cho Ha is demonstrating utmost ministerial irresponsibility for decreeing that KTMB ticketing system project continues despite investigation of irregularities by MACC

It has been confirmed by both the Transport Minister as well as KTMB officials that KTMB is facing investigations by the Malaysian Anti-Corruption Commission over irregularities over the award of the RM85 million “Design, manufacture, supply, installation, testing and commissioning of automatic fare collection (AFC) system for KTMB's Commuter Stations”.

KTMB is being investigated for alleged fraud in rigging the tender evaluation process to ensure award to the “designated” company, despite being 18% more expensive than 2 other bidders.
It is hence shocking that the Transport Minister, who is also the MCA Secretary-General, Datuk Seri Kong Cho Ha chose to ignore the major implications and ramifications of such an investigations, and immediately decreed that the project must proceed with the awarded contractor without delay.

By proceeding with the project with a potentially “underqualified” company at a significantly higher cost means that the project may not achieve its goals, and KTMB will be spending more money than absolutely necessary. Given KTMB's precarious financial position of cumulative net losses of RM1.45 billion as at 2008, the entity could ill-afford to be extravagant with its expenditure. What's more, KTMB has been unable to service even its soft loans amounting to RM880 million from the Federal Government which have fully matured as of July 2010.

By choosing to proceed with the project amidst serious investigation for fraud, Datuk Seri Kong Cho Ha has also turned a blind eye on the Prime Minister's NKRA on fighting corruption. The Transport Minister's care-less attitude is not only the height of ministerial irresponsibility, but will also cement the perception that the Barisan Nasional government is not at all serious about fighting rampant corruption. The increasingly negative perception has reduced Malaysia's Transparency International's Global Corruption rankings to a record low of 56th place in 2009 from 33rd in 2003.

What is worse, KTMB has demonstrated incorrigible behaviour over the past decade with a whole laundry list of poor governance and suspicious deals signed over the past decade, including the purchase of 38 EMU 6-coach units from China worth RM1.9 billion, 8 second-hand diesel multiple-units (DMU) worth RM64 million and the disposal of land which does not belong to KTMB.

I call upon Datuk Seri Kong Cho Ha to declare his position with regards to the award of the AFC contract, as to whether he is completely satisfied with the evaluation process and that the company awarded is the most competent of the shortlisted companies to deliver the project. If he has doubts or is unable to unequivocally declare his position, then he should then immediately suspend the award of the project to ensure that only the company with the best track record at the best price will receive the award of the project.
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