Despite open tenders being touted as the antidote to graft, Federal Territories Minister Tengku Adnan Tengku Mansor said open tenders can sometimes cause the government to lose money.

This can happen when the lowest bidder wins the contract, but then fails to meet project deadlines, he said.

“Sometimes open tenders can give problems, especially when the winning bidder offers a low price, but in the end, the project we hoped would be completed in a certain timeframe, is not.

“In the end, when we re-tender (the project), it costs the government more than the original budget,” he told reporters in Kuala Lumpur this morning.

He was responding to a statement by Transparency International - Malaysia president Akhbar Satar, who was quoted by Astro Awani on Aug 18, saying that the government should conduct its procurement processes through open tenders rather than direct negotiations.

“Every tender should be done openly because direct negotiations can make people more inclined to award tenders to their cronies.

“What's important is to make sure that the tender is given to the best qualified people and the best contractors.

“Otherwise, there is a possibility that the project would not be completed and become abandoned. We need to scrutinise who we award our tenders to, because this involves taxpayers’ money,” he was quoted as saying.

Tengku Adnan said he agreed with Akhbar, and added that his ministry is working to cover loopholes that had previously been exploited for ill-gotten gains.

He also clarified that it is no longer government policy to offer contracts through direct negotiation.

He said his ministry offers contracts through open tenders whenever possible, but it sometimes offers them through selected tenders if expertise of a particular type is needed, or if a certain method can help save money.

On Aug 15, the Malaysian Anti-Corruption Commission had arrested three senior officials on allegations of graft, including a Kuala Lumpur City Hall senior officer, holding the title ‘Datuk Seri’.