DAP demands open tender for all ETP public projects

By Shazwan Mustafa Kamal, The Malaysian Insider

KUALA LUMPUR, Oct 26 — All projects under the Economic Transformation Programme (ETP) should be awarded through an open tender process without exceptions, said the DAP today.

DAP national publicity secretary Tony Pua claimed that an open tender process for all ETP projects, including those that benefit the public such as the proposed RM43 billion Mass Rapid Transport (MRT) system, is needed to ensure that the government obtains “maximum value at the lowest possible cost.”

“The Prime Minister completely misses the point of the Government open tenders. Directly awarding a mega-project to a private consortium which subsequently tenders out the respective works maximizes the profits for the consortium, not the government,” Pua told reporters today.

His remarks come after Datuk Seri Najib Razak’s announcement yesterday that open tender was not suitable for all the 131 entry point projects (EPP) identified under the ETP.

“There are some contracts that you just cannot tender out,” Najib said yesterday.

Performance Management and Delivery Unit (Pemandu) CEO Datuk Seri Idris Jala later defended the selective open tender approach, insisting that public good projects like the MRT for Kuala Lumpur could not be brought to tender as they were too exorbitant to be funded by private companies, citing similar experiences in other countries.

The MRT is some 156km long, covering a radius of 20km from the city centre and have a capacity of two million passengers per day.

Idris said yesterday that restricted bidding and direct negotiations could sometimes lower project costs if cost comparison benchmark studies were undertaken with diligence.

“Direct [negotiations] can bring down the prices if you know what you’re doing,” he said.

In response today, Pua rebuked Idris for his remarks, stating that choosing direct negotiations over open tenders often resulted in higher costs for the government.

“One only has to refer to the new palace project in Jalan Duta where after direct negotiations, the contract size was increased from RM400 million to RM650 million, which was subsequently incurred additional variation orders raising the overall cost to RM811 million,” said Pua.

The Petaling Jaya Utara MP cited Singapore and Hong Kong as countries with “world class” MRT systems which went through a complete open tender system.