The construction of the new official residence of the King in Kuala Lumpur has come under scrutiny from opposition party PAS.

In a memorandum to the Works Ministry on the RM1 billion Istana Negara project today, the opposition party claimed that the appointed contracting firm was unqualified to do the job.

PAS said the construction costs of the palace became "unacceptably controversial" when it increased from RM400 million to RM1.1 billion.

"Why was the project carried through direct negotiations and in such an unusual way. Why is the offer price for the contractors so high?" PAS information chief Mahfuz Omar told reporters after handing over the memorandum at the ministry's headquarters in Kuala Lumpur.

The letter was received by the ministry's secretary-general Syed Jamal Syed Jaafar.

Mahfuz said Maya Maju Sdn Bhd should not be selected as the main contractor as the company was not classified as a Class A contracting firm and has yet to be registered with the Contractors Service Centre (PKK).

"Why was the price negotiations done hastily and given to unqualified contractors?" he asked.

Why no open tenders?

The memorandum, signed by Mahfuz, contained allegations of misappropriation of funds, abuse of power, cronyism and criminal breach of trust in the construction of the palace, which is located along Jalan Duta.

Mahfuz said such problems could be avoided if contracts were awarded in a transparent manner.

"The award of contracts through direct negotiations went against Prime Minister Abdullah Ahmad Badawi's promise that all government projects under the Ninth Malaysian Plan are done through open tender," he said.

He said the construction of the Istana Negara should not have been placed on such high priority by the ruling government "since the palace was not a great national security issue."

In the memorandum, Mahfuz described the increase in construction costs as "unreasonable."

"What are the changes made to the original construction plan that would cause the costs to increase by over a 100 percent?" the memorandum read.

Meanwhile, Syed Jamal said the ministry will draft a report to answer to the allegations.

Construction of the Istana Negara, which takes up 97 hectares, began last June and is expected to be completed by 2009.

The ground breaking ceremony was graced by Yang di-Pertuan Agong Tuanku Syed Sirajuddin Tuanku Syed Putra Jamalullail last year.

Watch the three-minute video here.