Malaysia has a better chance of winning the World Cup than the government getting the RM159.8 million in compensation from Perangsang International Sdn Bhd (PISB), said DAP secretary-general Lim Guan Eng.

In a statement yesterday, he said the money was as good as gone unless the government took stern action against the state and federal government officers responsible.

PISB - a subsidiary company of the Selangor government's investment arm Kumpulan Hartanah Selangor Bhd - was contracted in 1994 to build the Malaysian External Trade Development Corporation (Matrade) building by 1997.

By the time the building was completed last month by other contractors, the cost had shot up to RM287.5 million, with RM64.8 million being spent on repairs and another RM95 million owed in late delivery charges.

On the other hand, PISB had been sold off, renamed, and wound up before it could be forced to cough up its debt.

The episode raised the question of whether the Selangor state government had premeditated the plan since 2003 to 'cheat' the federal government of paying the compensation.

Collective responsibility

On Tuesday, Works Minister S Samy Vellu pinned the blame partly on the Finance Ministry for insisting on PISB despite the Works Ministry's advice to engage Ireka Construction Bhd for the project.

Commenting on this, Lim took the minister to task for passing the buck.

"For Samy Vellu to try to pass the blame to someone else is a violation of the principle of collective responsibility. So long as he is part of the government, he is equally to blame," he said.

According to Lim, there were several questions which needed to be answered. These were:

  1. Why was the Finance Ministry that pushed for PISB despite its lack of proven track record and experience not punished for making this blunder?

  • Why were PISB or its directors not sued in 1999 for not doing their job competently?

  • Why did the government grant the contract without insisting that PISB directors, the Selangor or federal governments give personal or corporate guarantees?

  • Why were the terms of the contract so generous that the contractor could walk away without agreeing to do remedial work?