I refer to the Malaysiakini report Sue us but no payment for now, PKA tells Kuala Dimensi .

The conditions of contract (CC) in the development agreement for the PKFZ project between the Port Klang Authority (PKA) and developer Kuala Dimensi allow for a maximum permitted variation of 20 % beyond the development cost.

The CC also mentions that the professional fees shall be borne by PKA although no figure is quoted. In normal contracts, the professional fees vary between 7-10%, with the lower rate being the norm for large contracts such as that for the PKFZ.

As been widely reported, the variation costs and professional fees have widely exceeded these figures. For a development cost of RM1 billion, the variation should not exceed RM200 million while the professional fees should be limited to RM100 million if the higher rate of 10% is paid for professional services.

Now, PKA being the sole implementor of the project, had a project management team comprising the general manager, the engineers, the accountants and legal officers and this team would be fully responsible for the execution of the project from conception to completion.

Their functions include ensuring the rules and regulations are complied with as per the CC, evaluation and approval for change in scope of work or variations, compliance to specifications, determining fair pricing with relation to variations, meeting datelines and targets etc.

Here, as reported in the media, the variation and professional fees have grossly exceeded that stipulated in the CC and the project management team should be held responsible and answerable for the huge positive deviation in costs.

All contracts have CC and specifications and these are legally binding. Ensuring compliance should be the cardinal rule of the project management team. It is a requirement that when variations exceed the stipulated rate, ie. 20% in this instance, the entire project has to be reassessed and renegotiated or re-tendered to benefit the client ie, PKA in this case. This seems to be have been overlooked by the project management team.

Again, the limit of the approving officer for the variations is guided and limited depending on the rank of the officer in the project management team concerned as these are clearly spelt out in the financial regulations of PKA.

So the issue of whether the approving officer had exceeded his limit becomes questionable and going by the huge variations in this case, the financial regulations were possibly grossly violated.

It has been reported that the quantity surveyor (QS) appointed by PKA had also been on the payroll of Kuala Dimensi. Why was it so necessary for PKA to appoint such a surveyor when the government has a long register quantity surveyors available?

It is appropriate that a thorough investigation of the performance management team be undertaken on the need to appoint a quantity surveyor who is not neutral. The surveyor by norm should be beneficial to PKA.

It must be emphasised that the QS plays a very vital and crucial role in determining costs of contracts especially when huge variations are involved. In this situation, there has been no check and balance.

The performance management team, being the sole implementor of the PKFZ propject, had a free hand to change the scope of works which invariably led to vast variations and therefore the increase in costs. Rules and regulations had been vigorously violated and ignored.

For the Transport Minister to now say that a committee on good governance headed by the president of Transparency International Malaysia has been formed to review the procedures in PKA is another excuse with the intention to mislead the public.

To the layman, the entire episode of PKFZ and its performance management smells of fraud, corruption and mismanagement so why is no action being instituted as a immediate positive response when all evidences seem to be right in front of our eyes?

Forming committee after committee is just evading the issues at hand and protecting the culprits. What is the MACC doing? They do not even seem to be moving when so much evidence is already on their plate!

Looks like while Malaysia is already known around the world as having a tainted judiciary, now the government's poor project management and governance is giving a negative impression to the world. What a shame.