New palace: Direct contracts due to 'safety'

By Syed Jaymal Zahiid - Free Malaysia Today

FULL REPORT KUALA LUMPUR: The contracts to build the nation's new palace worth RM811 million were awarded directly to three companies, said Deputy Works Minister Yong Khoon Seng.

He told Parliament today that after "consulting the private sector", the government had decided to award the contracts to the three companies.

Yong cited "safety" reasons for the decision to award the contracts directly.

This runs contrary to Prime Minister Najib Tun Razak's vow to award government contracts through an open tender process under his New Economic Model.

The new palace construction in Jalan Duta is currently underway.

Yong said the construction was divided into three categories: the main complex, the public space including parking lots, and road upgrades around the palace

The contract for the main complex and the public space worth RM650 million had been awarded to a company named Maya Maju Sdn Bhd.

Meanwhile the sub-contract to upgrade roads worth RM130 million and RM32.5 million were awarded directly to Ahmad Zaki Resources Bhd and Kejuruteraan Kenari Sdn Bhd.

Taiping DAP parliamentarian Nga Kor Ming blasted the government for the lack of transparency when awarding the contracts.

He also demanded to know why the cost had ballooned by 100 percent since it was announced by then Works Minister S Samy Vellu in 2006.

100 percent cost inflation

In a statement issued immediately after the announcement, the first-term MP questioned the rationale behind the direct awarding of the contract.

"According to the Treasury rules, any award or procurement of government contracts worth more than RM200,00 must undergo an open tender system. The contracts to build the new palace did not meet this criteria," said Nga.

Nga also said he was shocked by the 100 percent cost inflation within five years.

But Yong in his reply defended the move to award the contracts through direct negotiations because the construction of the new palace was "special".

He also said the cost of the new palace was cheaper compared to other palaces as the land on which the new palace is to be built on was cheaper.

"The land cost RM670 per square feet, whereas it was sold at RM1,000 per square feet in other states like Selangor, Kedah and others where the palaces are situated," he said.