AUDIT REPORT The Railway Asset Management (PAK) has been rapped for paying its maintenance contractor almost RM100 million despite the electric trains operated by KTM Bhd missing part of the daily servicing over five months in 2012 and 2013.

Payment are made each quarterly for the two years’ period where a total of RM133 million should have been doled out to the contractor, within the two-year period where RM16.656 million are paid each quarter.

However, the report noted that of the five months, two months namely in December 2012 and May 2013 recorded more than 50 percent of scheduled maintenance for the electric multiple units (EMU) was not done.

The cut in payment was not done as a result of there being no detailed payment for the maintenance as the average payment had already been decided for the first quarter and final quarter.

“The Audit Department cannot find the justification for the fixed rate of payment which is decided upon,” the report states.

These trains are the 38 sets of EMU operated by KTM Komuter.

To make matters worse, the fine that PAK imposed on the servicing company for its delay in providing replacement equipment was also calculated at less than what it should be - by RM1.447 million.

PAK only calculated it at RM435,500 compared with the actual fine of RM1.882 million, the latest Auditor-General's Report 2013 states.

According to the agreement signed in 2011, China-based CSR Zhuzhou Electric Locomotive Co Ltd is supposed to maintain daily, weekly and monthly maintenance that encompasses the bogie, braking unit, valve, air pipe, door system, electrical equipment, roof equipment, control circuit unit and others.

However, according to the audit report, maintenance service was done in August and December ranged from only 24.9% to 50.4% in 2012, while in 2013, the daily service was not properly done in February, May and July.

'Trains could not be sent for maintenance'

The report states that the daily servicing was not done because Keretapi Tanah Melayu Bhd (KTMB), could not send the EMU to the maintenance centres in Sentul, Kuala Lumpur, and in Tanjung Malim, Perak.

The auditor-general also complained that the spare parts arrived late as some were supplied in stages while others were kept at the KTMB depot in Sentul and at the company's warehouse in Port Klang.

Checks by the auditor-general in December 2013 showed that no deductions were made, from the almost RM100 million paid to CSR Zhuzhou Electric Locomotive, for the company's failure to perform daily servicing for the five months.

“In the auditor-general's opinion, the management of the payment of maintenance for the EMU is unsatisfactory as payment was made for the daily servicing work that the contractor failed to do in those months,” the report states.

However, PAK in its reply said the daily maintenance involved visual inspection to detect any defects in the trains in operation.

“The drivers of the locomotives are trained to conduct daily inspections before the train goes into operation, in addition to their normal tasks.

“The improper payment did not happen as PAK is only the payee office, which pays on claims that have been verified and acknowledged by KTMB as the party running the project.

“PAK feels the issue of improper management is raised because of not having the proper technical expertise for maintenance. PAK has paid the amount after all claims had been verified by KTMB, based on the Finance Ministry directive,” the reply says.

The asset management company added that the payments to CSR Zhuzhou Electric Locomotive were made to ensure that the 38 EMU's were properly maintained, in line with the scope of agreement with KTMB.




















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