AUDIT REPORT The RM73 million Malacca Customs and Immigration Quarantine Complex (CIQ) was illegally built on a private land, which eventually cost the Malacca government RM10.8 million, says the Auditor-General's Report 2012.

The report pointed out that the federal project, which included a jetty, was to be built by Pesona Metro Sdn Bhd on a plot of 1.78 acres at the mouth of the Malacca River.

Melaka River CruiseHowever the building required four acres of land. So, with the help of state authorities, the state government in October 2010 approved an additional 2.22 acres of adjacent land to make up the difference.

The said land was in fact owned by Pembinaan Kota Laksamana (Melaka) Sdn Bhd, which then issued a trespassing notice against the project contractor.

Despite the legal warning, the federal government instructed the contractor to continue with its works, resulting in the land owner filing a lawsuit against the contractor.

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Following this, the federal government agreed to take responsibility on behalf of Pesona Metro Sdn Bhd if it faced any legal action from the land owner.

The tussle finally ended when the Malacca government agreed to compensate RM10.8 million to the land owner.

The project itself had been plagued with problems as it was supposed to be constructed in 2007, by Dinamik Maju Corporation Sdn Bhd at a cost of RM32.89 million.

However, the contract was terminated on mutual grounds on Sept 27, 2008, due to rising costs and a build time that was too long.

By the time the project was restarted, with a new contractor appointed on July 28, 2010, the cost had skyrocketed by over RM40 million to RM73 million.

Up to May 2012, a total of RM71.13 million had been spent on the project.

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Three-part format for Auditor-General's 2012 report