Tuesday, August 5, 2008

Incompetent contractors, delays, cost overruns, failed projects: Lessons learnt

05 Feb 2007
Farrah Naz Karim

PUTRAJAYA: The government has put in place mechanisms to avoid delays in project completion and ensure cost effectiveness. Referring to the New Sunday Times report yesterday on cost overruns in projects due to the incompetence of contractors and consultants, Minister in the Prime Minister’s Department Datuk Seri Mohd Effendi Norwawi said the mechanisms would ensure only competent contractors were given government jobs.

He said the government had drawn valuable lessons from case studies of failed projects, as well as the successful ones.

“We have put in place new initiatives to streamline our procurement processes and to ensure projects are delivered efficiently and cost effectively.”

These, he said, included:
• Ensuring projects are awarded to competent contractors; and,
• Installing systems to monitor projects on near real-time basis to spot any delivery problems early and resolve problems immediately.

This, Effendi said, should ensure significant improvements in the execution of projects under the Ninth Malaysia Plan (9MP).

The report quoted Deputy Auditor-General Anwari Suri as saying that some tenders for government projects had been given to those who were incompetent or did not have sufficient financial means to complete the work.

Anwari had said that these were among the reasons for shoddy work and delays in project completion.

Effendi assured that the government had put in place a more stringent project procurement process.

Meanwhile, the Finance Ministry is considering setting up a central database system to prevent contractors from "hoarding" projects and sub-contracting them.

Parliamentary secretary Datuk Dr Hilmi Yahaya said the issue of sub-contracting needed to be addressed immediately.

At present, he said, only consultants undertaking projects worth over RM50 million were registered with the government.

"We need a central system to monitor projects awarded to contractors, even those at the district level," said Hilmi.

Education Minister Datuk Seri Hishammuddin Hussein said his ministry had put in place an "A-to-Z" monitoring system to ensure there were no hiccups in the implementation of projects.

A strict vetting process for engaging contractors, he said, was in place to ensure that contractors who were already engaged in several other government projects were not awarded contracts by his ministry.

This, he said, would mean the contractors concerned would be able to give priority to his ministry’s projects.

"A delay in projects spells problems. For this ministry, it also means that our children will not be able to go to school. It is vital that construction projects for educational purposes be completed within the time frame.
Companies that offer my officers bribes and those with a history of not completing school building projects will be blacklisted," said Hishammuddin.

Comment: Later...

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