George Kent LRT Award: Najib Broke All Rules

Datuk Seri Najib Razak shamelessly broke every single rule on transparency, accountability and integrity, making a complete mockery of the Ampang Line LRT “open tender” and exposed his cornerstone “Government Transformation Programme” as nothing more than rhetorical propaganda

After playing hide-and-seek with the Malaysian public for more than a month, Syarikat Prasarana Negara Berhad (Prasarana), the project and asset owner for the LRT Line Extension Project (LEP), said in a statement today that the contract for “Engineering, Procurement, Construction, Testing and Commissioning of System Works” for the Ampang Line Extension Project has been awarded to a George Kent-Lion Pacific joint venture.

The consortium led by George Kent, is at the centre of repeated opposition allegations that it received preferential treatment from the government is understood to have secured the contract for RM1.18 billion.  This is despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.

PKR Strategy Director Rafizi Ramli has exposed that the MoF’s Acquisition Committee, which met this January 25, had originally over-ruled initial lower-priced recommendation from Prasarana decided to award the contract to British engineering firm, Balfour Beatty-Invensys Consortium, which bid RM1.01 billion for the job.

Subsequently it was exposed that the MoF Acquisition Committee headed by none other than the Prime Minister himself, reversed the earlier decision to awarded an even higher priced contract to the George Kent consortium.

What is completely beyond belief in the sheer abuse of power by the Prime Minister himself is that George Kent a manufacturer and supplier of “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage” can be qualified for a billion ringgit LRT project.

What is worse is the fact that George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012.  What justification can be given by Datuk Seri Najib Razak that a company with only RM152 million in revenue could be awarded a RM1.18 billion ringgit contract, despite having been disqualified technically from the project?

The Ampang LRT project isn’t the first to suffer from abuse and controversy.  In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest.  The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.

The decision to proceed with the award proves beyond doubt that Datuk Seri Najib Razak is willing to shamelessly break every single rule on transparency, accountability and integrity, despite the scandal having been exposed.  The decision and announcement makes a complete mockery of the Ampang Line LRT “open tender” which does not play by the book and will severely dent the confidence of Malaysians in the multi-billion ringgit projects to be similarly awarded via “open tender” such as the RM53 billion MRT and RM8.7 billion Langat 2 water treatment plant.
The blatant crony award of the RM1.18 billion contract above also confirms that the Prime Minister’s cornerstone “Government Transformation Programme” (GTP) to improve transparency and reduce corruption is nothing more than rhetorical propaganda.  This is because none other than Datuk Seri Najib Razak himself has chosen to dismiss the policies proposed with the GTP.

Malaysians are expressing both outrage and disappointment with the Prime Minister who has promised so much with his “transformation” agenda but delivered so little.  Despite all the promises and pledges, Datuk Seri Najib Razak has chosen to continue the crony capitalism practices carried out by his predecessors at the expense of good government and the rakyat’s interest.