Govt ends Zecon’s contract for Petra Jaya Hospital

We can no longer afford any delay and this is a message to all contractors that the govt does not accept bad work


Zecon Bhd’s contract as the turnkey contractor for Petra Jaya Hospital in Sarawak has been terminated due to “unacceptable” work delays.

Health Minister Dr Dzulkefly Ahmad (picture) said the ministry has received a principle approval from the Cabinet to end Zecon’s contract for the RM495 million hospital.

“We will conduct the necessary procedure to terminate the contract. We can no longer afford any delay and this is a message to all contractors that the government does not accept bad work,” Dr Dzulkefly told reporters after his keynote address at the 2018 Healthcare Forum in Kuala Lumpur yesterday.

During a trip to the Sarawak state capital on Tuesday, Dr Dzulkefly held a meeting with the Sarawak State Health Department, state excos and the Public Works Department (JKR), who unanimously decided the contract held by Zecon should be discontinued.

A visit to the project site revealed that the 300-bed hospital was only 34.54% completed, even after the initial Nov 29, 2016, deadline had been successively extended to December this year.

The contract was first awarded to Zecon in April 2013 by JKR. In a filing to Bursa Malaysia then, the Sarawak-based engineering and construction firm said the project was for a duration of 42 months.

The new hospital is expected to alleviate the congestion at the Sarawak General Hospital and also serve residents in the rapidly-expanding city. However, persistent delays have led to serious overcrowding at the state’s largest hospital.

Dzulkefly said the government will not opt to appoint a new contractor via open tender as it will cause a delay of two to three years.

“JKR will take over the project and decide on the new contractor. Nevertheless, we will maintain the services of nominated sub-contractors and consultants who have performed and conducted their jobs well,” he added.

Currently, there are 23 hospital and clinic projects nationwide which the ministry has classified as in the “red zone”, which indicated that the projects were delayed by 20%.

Out of the 23 medical facilities, nine are hospitals and some had been pushed back by two years.

Prior to his inspection of the Petra Jaya Hospital, Dr Dzulkefly visited the Rembau Hospital which is also facing similar delay issues. The 76-bed hospital was due for completion in September 2016, but the contractor was given until June this year to complete it.

Works on the RM104 million hospital began as early as September 2013, but the initial contractor was replaced due to design and structural problems. The new contractor said the hospital would be opened by year-end, but Dr Dzulkefly has expressed his doubts.

He said the government had to spend an additional RM8 million to complete the construction of the Rembau Hospital due to the delays.

On a separate note, Dr Dzulkefly said the Cabinet task force on de-monopoly is expected to meet next week to iron out the new government’s policy on the matter.

He said stakeholders in the healthcare industry will be referred to after the ministerial meeting.