Despite a whopping RM1.14 billion overrun in cost, the Public Accounts Committee (PAC) however failed to detect any wrongdoing in the 180-kilometre Rawang to Ipoh double-tracking project.

NONE "Based on our findings, it is hard for PAC to say that there is any embezzlement in the project because we found that most of the management implementations followed procedure, especially the financial procedure," PAC chairperson Azmi Khalid told reporters in Parliament.

However, he said there is much room for improvement with regards to the implementation of the multi-billion ringgit project.

"When the government decided to build the Kuala Lumpur International Airport (KLIA) 13 years ago, its implementation and management were very meticulous.

"But this time, although it only involved a double-tracking project, the implementation was untidy. So the issue that we will be raising to the government is to improve the standard of its procedures," he said.

The 2008 Auditor-General's Report had stated that the RM6 billion double-tracking project was poorly managed, and this resulted in losses amounting to RM1.14 billion.

According to Azmi, representatives from Transport Ministry, Keretapi Tanah Melayu Bhd (KTMB), consultants and contractors involved in this project have been called up prior to the findings.

However, he said, the witnesses will be called up again to a date yet to be fixed by the committee for further investigation.

“We will call again those related to the project especially to look into the contractor’s liability on project and what was stated in the agreement,” he said.

The infrastructure works component of the project was originally awarded to DRB-Hicom Bhd in 2000 for a value of RM2.58bil but this was taken over by UEM Construction in 2005 after 88 percent of the project had been completed.

Japan’s Mitsui was given the electrification and signalling component of the project worth RM1.9bil.

Weaknesses at all stages

Elaborating, Azmi said the committee had detected weaknesses at all stages including the project implementation and additional payments.

“But the most obvious weakness is when they wanted to obtain the land. The problem arose when the city council took a long time to approve the land agreement.

“Not only this had caused delay to the project, this also resulted to additional technical costs and even from the start, KTMB’s statement of needs was not complete,” he explained.

Apart from these weaknesses, Azmi noted that the period given for the land acquisition was too short as the project needed to be completed urgently.

“The 60-hectare land acquisition was done in a hurry... because of this too the cost of the project has shot up,” he said.

According to the PAC chief, the project involved two phases - infrastructure and system. However, the two phases was not planned in advance, resulting to additional costs.

“Again there were requirements that were not seen in the earlier part because when you introduce new items, it will cost more money.

“Delayed contracts also cost money to the contractors and suppliers. So there is money (lost) everywhere,” he said.

Azmi also cited another reason that caused the project, which started in 2000 and was supposed to be completed in 2005. Instead it was completed two years later.

“We found that there was a variation order of about RM588 million that was approved but not paid by the government and that also caused delay. The contractors have done their work but not yet paid,” he said.

The project allows KTM Bhd to run trains between Kuala Lumpur and Ipoh.

Meanwhile, the Ipoh to Padang Besar portion of the rail project has been awarded to construction companies Gamuda and MMC Corporation.

When completed, the RM12.5 billion project will cut travelling time from Kuala Lumpur to Butterworth from nine hours to three hours.

Gamuda is linked to the Perak royal family with Sultan Azlan Shah’s daughter Raja Eleena holding a major stake.