Saturday, June 15, 2013

Why is Transport Ministry Silent on KLIA2 Fiasco?


We would like to ask why is it that the newly appointed Minister of Transport, Datuk Seri Hishamuddin Hussein been silent as a mouse over the entire RM4 billion KLIA2 fiasco by the Malaysia Airports (MAHB)?

The current KLIA2 airport contract was scheduled to be completed by September 2011 but has been delayed at least 7 times since then with no definite deadline in sight.

MAHB has claimed that the delays plaguing the completion of KLIA2 is the result of the non-delivery of parts of the project by contractors, leading Malaysia Airports Holdings Bhd (MAHB) to come out to say that it would impose liquidated and ascertained damages (LAD) on the responsible parties.

Unsurprisingly, the main contractors of the project all lined up to deny their complicity in the delays and placed the blame squarely on MAHB the project owner who allegedly made repeated variation orders to the original contract.

While we are not privy to the details of the dispute which is now triggering the blame game between the various parties, the question that needs to be asked is, after nearly 2 years of delay, why is it that MAHB is only coming out for the first time to blame the contractors?  If it is really the contractors who are at fault, why haven’t they been penalised with the LAD since September 2011?

As the Minister of Transport with direct purview over Malaysia Airports, Datuk Seri Hishammuddin must step in immediately to resolve this protracted scandal and bring to task all those who are responsible for the embarrassment to the nation, and the sheer waste of public funds.

What is worse is the fact that the Ministry of Transport should have been well on top of the scandal as the Secretary-General of the Ministry, Datuk Seri Long See Wool sits as a Board of Director of MAHB.  Datuk Seri Long has been a Director since 9 September 2008 and he also sits on the Board Procurement Committee and Board Risk Management Committee of MAHB.

Therefore unless the Secretary-General of the Ministry of Transport himself decides to say that he knows absolutely nothing about what is going on in the KLIA2 fiasco, the Ministry cannot deny culpability in the entire debacle.

This  drastic increase in cost has resulted in MAHB having to raise bonds amount to RM3.1 billion to date, with another RM1 billion expected to be raised in the near future, causing MAHB to take on debt which may not have been necessary in the first place.

However, the ultimate losers on the “low cost” airport which busted the budget will be the Malaysian travellers who will have to bear the cost of higher airport taxes for MAHB to repay its debts.  This will also severely impact Malaysia’s competitiveness as the hub for low-cost carriers in the Asia region.

This conundrum of higher debt will also result in a conflict of interest for Datuk Seri Long and the Ministry.  The question will be raised as to whether as a Board Member of MAHB, will Datuk Seri Long support the increase in airport taxes to help MAHB pare down its debt and raise its profitability or will he take on the regulator’s role of suppressing airport taxes to protect the interest of ordinary Malaysians as well as our competitiveness as the hub for low-cost carriers in the region?

Dato’ Seri Hishamuddin Hussein must also declare as to why the contract for Managing Director of MAHB, Tan Sri Bashir Ahmad who has helmed the company for the past 9 years will be ending in 7 June 2013, has been extended again as at 6 June 2013 for an additional year. It is clear that Tan Sri Bashir has failed to competently manage the single largest project by MAHB during his reign and his contract must not be renewed.  The failure and scandal of KLIA2 cannot be excused but Malaysians are once again victims of Barisan Nasional’s incompetence when those who fail the rakyat get their contracts renewed for the umpteenth time.

Finally, we also call upon the Minister to also support the call by Air Asia CEO, Aireen Omar to set up an independent body to probe the much-delayed construction of the new low-cost airport, KLIA2.  She said that “unless the true cause of the delay is made known, AirAsia feels there may be more finger pointing (against AirAsia or contractors) which will do nothing towards the completion of the project”.

Datuk Seri Hishamuddin, who has yet to respond to Pakatan Rakyat’s call for a meeting over this issue, must respond immediately over these issues raised and tackle the crisis which may yet worsen to ensure that the interests of Malaysians are protected.
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