Tuesday, November 01, 2011

Defence Ministry Yet to Resolve Last Year's Scandals

Site visit with Johor Bahru DAP Members to
Skudai 7th Brigade Army Camp

The Minister of Defence should not be mischievous in asking the Federal Opposition to stop objecting to defence procurement but instead answer for the complete lack of action against irregularities raised by the Auditor-General in its annual reports

Bernama has reported that the Defence Minister, Datuk Seri Zahid Hamidi has stated that the Royal Malaysian Air Force will buy new aviation ground support vehicles (AGSV) next year as the existing fleet was becoming too costly to maintain. He said that “The majority of AGSV are old and need to be replaced. The Auditor-General’s Report clearly shows the critical need for the new assets.”

He urged further for the federal opposition not to question his ministry’s need to spend on new assets during times of peace, saying the Auditor-General’s report should “open their eyes” to reality.

Datuk Seri Zahid Hamidi should not be so mischievous as to blame the federal opposition for objecting to defence procurement such as to purchase new equipment to replace items which are no longer usable or safe to use.

We have never protested against the Ministry of Defence from purchasing new equipment or vehicles. What we have protested strongly is the complete lack of transparency in the manner where these items are purchased, which appear to cost substantially higher that the necessary spend.

Datuk Seri Zahid Hamidi for example, in his reply to my question in parliament, has refused to clarify what makes the difference between the RM7.55 billion procurement of 257 armoured personnel carriers from Deftech Sdn Bhd and the price which the latter paid to acquire these vehicles from FNSS Defence Systems, a Turkish defense manufacturer for RM1.7 billion. The Minister had claimed ignorance over the RM5.9 billion difference, despite the fact that he witness the signing of the agreement between the 2 companies in Turkey earlier this year.

What is more important is the fact that while Datuk Seri Zahid was quick to state his intent to acquire new AGSVs, he has failed to explain or take action against all various discrepancies and potential abuse cited in the Auditor-General’s report. In the report for 2010 for example, the Auditor-General found that the maintenance contracts for the aged AGSVs did not have the necessary expertise to repair the vehicles and late penalties were not meted out to these contractors when they failed to repair the vehicles within the necessary time frame.

The Auditor-General had also criticised the “improper payments” of allowance to the Territorial Reserve Army personnel who according to the records, did not attend the relevant training. He had even recommended that the relevant officers be punished via “surcharge” as permitted under Section 18(b) of the Akta Tatacara Kewangan 1957.

While the Ministry of Defence may need time to “sort out” the problems highlighted by the Auditor-General in the current report, the Minister has no such excuse for not having dealt with the problems raised in the 2009 report. One of the scandals arising from the previous year’s report is the construction of a new RM256 million Skudai 7th Brigade Army Camp which was awarded in 1997 but has only achieved 18.3% completion.

I’ve personally visited the site (see photos) yesterday and found the construction site to be still in deplorable conditions, with massive soil erosion causing major mud floods in neighbouring residential areas and abandoned “ruins and relics” peppering the site. And yet, despite the massive delay, and recommendations by the Auditor-General to do so, the contract with the developer Kausar Corporation Sdn Bhd has yet to be terminated.

The Grand Canyon of Malaysia (1)

The Grand Canyon of Malaysia (2)

The Ancient Ruins of Skudai (1)

The Ancient Ruins of Skudai (2)

The Ancient Ruins of Skudai (3)

What is worse is the fact that Kausar Corporation has collected their construction fees in full via a land swap deal where the company was already given the ownership of a 153 hectares piece of land. Kausar was able to pledge this piece of land to a bank for the amount of RM465 million showing that the land which could be worth as much as RM800 million is well above the cost of construction of the camp.

It is the Army and the tax payers who have to suffer as the Ministry of Defence has already (over)paid for the construction works in full, and yet after more than 15 years, the Army is still awaiting its “new” camp to be completed. Despite the above, no action to date has been taken against the developer, including terminating the contract, charging late penalties or reclaiming the land which has been awarded to them.

The Minister of Defence, Datuk Seri Zahid Hamidi must answer for all of these major scandals instead of just putting his priority gleefully to procure new vehicles, and blaming the federal opposition for taking him to task.
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