The army hospital, 95 Hospital ATM in Kuala Lumpur, was built to much lower specifications although the original price was maintained.

Fixed at RM267.89 million, the contractor had cut corners at the hospital - currently partly operational - without informing the Finance Ministry.

This included cancelling air-conditioning for all the corridors and hallways of the facility.

In the Audit Report 2009, it was found that the other work requirements were cut, including:

  • decreasing the hospital space by 7,000 square metres (the size of five-and-a-half Olympic swimming pools).
  • decreasing the intercom system from 52 stations to 15 critical ones
  • cancelling the construction of the amenities block - lodging for the officers' families
  • decreasing the medical equipment by 60 percent.
The auditor-general later found out that the project management consultant (PMC) - which was hired to manage and monitor the project, had acted unprofessionally and that there were "miscommunications" on the cost of the project.

"Realistically, there was no decrease of scope and instead, there were misunderstandings and the PMC was unprofessional," said the report.

According to the report, the PMC had not informed the Finance Ministry that the cost of the project - already stalled for a few years - estimated back in July 2002 was inaccurate.

auditor report sink on door 251010 "There were also no applications to the Finance Ministry to decrease the scope", said the report.

The Auditor-General also said that the Defence Ministry had written an appeal to the Finance Ministry to consider the cost as agreed between the Defence Ministry and the contractor, Perbadanan Perwira Harta Malaysia at RM341 million, close to 30 percent more.

However, the Finance Ministry had insisted that the project would have to be opened up for tender again if the contractor did not agree to the initial estimate of RM267 million.

Design flaws and leaky pipes

The auditor general has found flaws in 95 Hospital ATM, not alien to a number of other projects.

The Audit Report has highlighted several foul ups including:

  • a sink placed right behind the door.
  • main door bangs into the toilet door.
  • the bathtubs for babies are too deep.
  • exposed polyurethane foam in the car park.
  • leaking pipes in the cafeteria sink.
The Auditor-General had also suggested to the Defence Ministry to set up an Independent review panel for mega projects costing more than RM100 million.

"This is to make an independent evaluation on design, cost and construction materials so that the government will get value for money," it said.