by BERNAMA / pic by ISMAIL CHE RUS
A TOTAL of 121 infrastructure projects valued at RM13.93 billion nationwide offered through direct negotiations and limited tenders by the Barisan Nasional government will continue after price negotiations by the Pakatan Harapan government resulted in cost savings of RM805.99 million.
These exclude mega projects such as the Light Rail Transit Line 3 project costing RM31.65 billion and Mass Rapid Transit Line 2 project costing RM39.35 billion, each was lowered to RM16.63 billion and RM30.53 billion respectively. The total costs saved from both projects amounted to RM23.84 billion.
The Ministry of Finance (MoF) said this followed the June 29, 2018, announcement on several initial steps sought to improve the governance of government procurement and country’s financial management, including reviewing projects offered on limited tenders and direct negotiations by the previous government.
“Based on the review, the government decided to undertake open tenders for limited tender and direct negotiation projects that have not yet been issued Letters of Acceptance (LoA).
“In the meantime, for the 121 limited tender and direct negotiation projects that had been issued LoA, additional agreements will be finalised as at end-March after the prices are re-negotiated as a rationalisation of the project costs, while reducing pressure on the government’s fiscal position,” it said in a statement yesterday.
“All the details will be dealt with by the respective ministries that handle the projects and will not involve the MoF anymore.
“Mindful of the current developments, the MoF is confident that the implementation of the government’s procurement through open tender in the near future will provide the best cost and value-added benefits to the government and the people.
“The old method of awarding contracts is maintained, but the only difference is that the open tender will be conducted to replace direct negotiation or limited tender award practice except for emergency factors and specific expertise needed or special reasons.
“For example, a contract offered to a Grade G1 contractor (formerly known as Class F contractor) is still the same, except it is only conducted in open competition among Grade G1 contractors and not as before, ie through direct negotiation, or with the need to obtain a signature of consent from divisional heads of political parties.
“The MoF will always take a comprehensive initiative to ensure that government procurement abides by the principles of efficient, accountability and transparency,” it said. — Bernama