PARLIAMENT Conflict of interest has been detected in the contract awarded for the construction of the RM100 million Express Rail Link (ERL) from KLIA to KLIA 2, the Public Accounts Committee (PAC) said.

This is because the shareholders of the contractor and the main shareholder of ERL are the same parties, PAC said in a report tabled in Parliament today.

The contract to design and build the 2.16km rail track was awarded to Syarikat Pembinaan YTL Sdn Bhd (SPYTL) and Seri Yakin Sdn Bhd through direct negotiations.

ERL is owned by YTL Corporation Bhd, which holds a 50 percent stake, Lembaga Tabung Haji (40 percent) and Trisilco Equity Sdn Bhd (10 percent).

"Indirectly, SPYTL was the interested party," it said.

 

The operator of the ERL and the contractor could have created a weakness in government to obtain financial advantage, it noted.

 

"There is also conflict of interest between shareholders," said the report.

 

The government had forked out RM100 million for the project slated to be built from July 2011 to October 2013.

"The allocation of the RM100 million grant for the project through the ERL connection should indeed be reviewed in depth since the government allowed part of the collection of a passenger service charge (PSC) which was gradually channelled to ERL as its income, even if passengers were not using it," PAC said.

It also called for this RM2 PSC fee to be abolished.

"In fact, the cost should be borne by Malaysia Airport Holdings Bhd (MAHB) and as such, the RM2 fee should be cancelled," it said.

 

With this, PAC also called for Auditor-General's Department to conduct a private audit on the construction site of KLIA to ensure the concession given to MAHD would not burden the government and rakyat.

 

"PAC also wants private procurement, used by the private sector, to be free from conflict of interest, said the report. 

 

The opposition has called the contract a dubious "sweetheart deal" for ERL company to expand its reach and double its business.