'Contractors' squabbles not our responsibility'
Works Minister Shaziman Mansor today absolved the government of any responsibility in the alleged squabbling over non-payment between the main contractor and sub-contractors of the troubled RM482 million Shah Alam General Hospital.
Works Minister Shaziman Mansor today absolved the government of any responsibility in the alleged squabbling over non-payment between the main contractor and sub-contractors of the troubled RM482 million Shah Alam General Hospital.
He denied there is anything wrong with the project although its completion date has been pushed back and work on site disrupted.
"In any contract between the government and a contractor, the government's responsibility only extends to the main contractor," said the minister in Parliament.
"As long as the project proceeds according to schedule and follows the terms and specifications of the contract, there is nothing that we can do."
Since the project appears to be proceeding mostly on schedule and there are no apparent breach of contract terms or specifications, Shaziman (right) said that the government does not have any issues or problems with the project.
This echoes a similar statement from the Public Works Department (PWD) saying that the Shah Alam General Hospital project is ‘clean'.
He was responding to an oral question from Tony Pua (DAP-Petaling Jaya Utara) on what will the government do to solve the woes the project's sub-contractors who were allegedly not paid for work done and about the main contractor that awarded the entire works for the project to the sub-contractor in an ‘Ali-Baba' scheme and its alleged financial difficulties.
The problems plaguing the construction of the hospital and irregularities in the award of the directly negotiated project, which was announced as an open tender, was first brought the attention of the public by Malaysiakini in December last year.
Minister: Some truth in claims
This is not the first time that the controversy has been brought into parliamentary discussions, as Pua and fellow opposition parliamentarian Khalid Samad (PAS-Shah Alam) continued to hammer the government over the hospital's delayed completion date, inflated cost and alleged improprieties in its directly negotiated award to an alleged government crony.
However, Shaziman indicated that the ministry is not blind to the concerns of sub-contractors who have not been paid by the main contractors for government projects.
"We have heard complaints from subcontractors and we find that there is some truth to their claims. As such the ministry is looking at drafting an act to look after the interests of sub-contractors who have not been paid," he said when approached by reporters at the Parliament lobby afterward.
The act being mooted, Shaziman said, is called the Construction Industry Payment Adjudication Act (CIPA), a law whereby qualified adjudicators will be appointed to solve the woes of unpaid subcontractors by engaging with the main contractor to facilitate payments.
The act has been in consideration for about a year, though the ministry does not yet have a timeline on its completion as more research must be done and feedback gathered from stakeholders.
Minister's claim refuted
In an immediate reaction, Pua and Khalid, who held a press conference at the Parliament lobby later, refuted Shaziman's reply.
"He said there is no problem, there is only a three-day delay and no other problems with the project. We have information that work on-site has been delayed because of non-payment to the sub-contractors. Work on site by sub-contractors has slowed because of this," said Pua (left in photo).
Furthermore, Pua pointed to a string of legal wrangles involving the project which he contends hints at serious problems with the project.
"The sub-contractor is suing the main contractor, the main contractor is also suing the sub-contractor. In fact, there are also lawsuits between the members of the main-contractor's board as well," he said.
These indicators, Khalid (left) said, should make it obvious that the are problems with the project which may cause it to stall.
"The ministry should pre-empt the problems. Friction between the contractors will surely result in delays," added the PAS leader.
On allegations that the project was awarded in total to the main subcontractor, Pua said that this goes against a clause present in all standard PWD contracts.
However, Pua suggests that the blanket sub-contract was given without PWD approval. Even if it is done with the department's approval, Pua said that this may hint at collusion by the government body.
"Does the PWD condone the ‘Ali-Baba' practice?," he asked.
Royal connections
At the press conference, Pua furnished reporters with copies of two letters to back his claim. The first is a letter awarding the entire works for the project to its former main-subcontractor Isyoda (M) Sdn Bhd by main contractor Sunshine Fleet Sdn Bhd, a company with links to the Selangor royal family.
A
search with the Companies Commission of Malaysia revealed that Sunshine Fleet is owned by the Selangor sultan's sister, Tengku Putri Arafiah ibni Sultan Abd Aziz Shah (70%), her son Putera Azamuddin Shah bin Abdul Aziz (10%), and her uncle Tengku Abdul Samad Shah ibni Sultan Salahuddin Abd Aziz Shah (20%).
According to Pua, the second letter is an undertaking by Isyoda that it will pay a RM46 million lump sum and 9.5 percent from each progress payments in ‘commission' to the chairperson of Sunshine Fleet as ‘payment' for assisting Isyoda in getting the sub-contract.
This, Pua said, is clearly ‘Ali-Baba' practice, pointing out that the RM46 million added in with the 9.5 percent ‘commission' amount to RM77 million in "clean profit" that the main contractor will make without actually doing anything.
"Why is the ministry not taking action against this practice? The PM himself said in his NEM speech that he will no longer tolerate rent seeking and patronage," he asked.
