The MMC Engineering-Gamuda Consortium has been real 'smart' in concluding the Smart (Storm Water Management and Road Tunnel) project awarded to them without any transparent open tender exercise.
There is always the question of why the contract was hurriedly awarded to the consortium on the eve of Dr Mahathir Mohamad's official retirement on Oct 30, 2003.
The Smart project will certainly create huge burden for Malaysian taxpayers. The revelation of the official costs of the Smart project was finally made public on June 2 this year together with the project's details.
- The total project cost RM1.933 billion
- Costs borne by the Malaysian government RM1.312 billion
- Loan from the government's Development and Infrastructure Bank RM300 million
- 'Investment' by MMC Engineering-Gamuda RM321 million
- 40 years of toll collection for the 4.3 km four-lane tunnel motorway
- 2.4 km of the motorway are dual purpose for flood mitigation and road traffic on two levels.
The main sub-contractors for this billion-ringgit project are Wayss & Freytag and BAM NBM of the Netherlands while the MMC Engineering-Gamuda is only involved in the 1.70km dual purpose motorway for flood mitigation and road traffic and other non-tunnel jobs.
I personally estimate the cost of the Smart project to be only around RM683 million with a variation of about RM70 million. Thus the total construction costs including engineering designs and construction should not be more than RM753 million.
MMC Engineering-Gamuda will only need the RM300 million from the Infrastructure and Development Bank to kick off the Smart project. The amount committed by the government is just additional profit for this consortium.
On top of this, the MMC Engineering-Gamuda still wants to enjoy another 40 years of toll collection for the 4.3 km motorway tunnel, giving more burden to Malaysians taxpayers and the EPF contributors who funded the project.
Due to the unrivaled political pressure from within Umno via invisible hands linked to the coming Umno general assembly, Prime Minister Abdullah Ahmad Badawi's administration has failed to investigate and fine-tune the many mega-privatisation deals awarded by the previous administration.
It is time that all patriotic members of parliament, especially those from Umno, come out to support Abdullah's administration in making the system more equitable and transparent.
For a start they should probe the irregularities of the Smart project by:
a) Immediately investigating the irregularities of procedures and process in MMC Engineering- Gamuda procuring the project on the eve of Mahathir's retirement;
b) Immediately investigating the costing of the Smart project as the RM1.933 billion price tag is definitely overpriced;
c) Immediately investigating the rationale of the government bearing RM1.312 billion of the project's development cost, which is almost double the actual project's construction cost;
d) Immediately investigating why the project had to be privatised since the government still has to fund the project.
The government should also revoke MMC Engineering Gamuda's 40-year toll collection concession by allowing the turnkey consortium to earn a one-off profit.
The authorities should also scrutinise the construction details of the project's proposal by MMC Engineering-Gamuda and impose a 100% windfall profit tax on the amount that the consortium overcharged the government for.
