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Author: Tan KW   |   Latest post: Sat, 21 Sep 2019, 9:11 PM

 

River of Life - a vanity project that fails to measure up - CYNTHIA GABRIEL & LALITHA KUNARATNAM

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Over the few months, the media has painted an ominous picture of the project which is now ranked as one of the hardest and most expensive urban river restoration projects ever undertaken.

The ROL project, launched in July 2011, is to transform the Klang River into a vibrant and liveable waterfront with high economic value. It is one of the former prime minister Najib Abdul Razak’s overambitious Economic Transformation Program, and a national strategy, to elevate Malaysia to a developed nation status by 2020. 

 

According to the 2015 Auditor-General’s Report Series 1, an audit was conducted on the sewerage projects under Component 1. It has revealed amongst others, lack of feasibility studies, procedural missteps, lack of oversight, poor contract management and enforcement, which contributed to cost escalations and delays in execution. These flaws continued to prevail since no corrective and preventive actions were taken to address them, as revealed in the subsequent audit in 2017.

 

 

  • as of October 2017, the costs of all six contracts increased by RM15 million to RM182 million;
  • all six contracts could not meet the completion date and this led to 19 EOT being granted, ranging from 92 days to 944 days;
  • time-at-large issues regarding the delays of contract certification;
  • inconsistent compliance of effluent river water quality standards;
  • the actual monthly operating cost of Water Waste Treatment Plant at Kuala Lumpur wholesale market was significantly material from 493 percent to 835 percent compared to the initial estimation by the consultant;
  • the operation at the Benteng Flood Reservoir Pool had ceased on Oct 29, 2015 (ie 10 days after the Certificate of Completion and Compliance was issued) and the government had to incur additional unrecoverable costs of RM324,000 to fix the problem; and
  • several thefts have incurred on the Benteng site resulting in further losses to the government.

Component 2: River beautification - what went wrong?

However, The Star reported on May 2019 that the collapsible weirs costing RM35 million at the Dayabumi Complex and Brickfields, had been out of commission for months and in fact, one of the weirs failed to take off from the start. During the launch of Phase 1 in August 2017, the collapsible weirs were described as a stroke of economic genius and now years later, they are eyesores and white elephants.

Meanwhile, Ekovest Bhd’s wholly-owned subsidiary, EkoRiver Construction was appointed as the main contractor for three out of five beautification work packages worth approximately RM489 million. 

However, a recent sight visit suggests that the contractor had no intention to make it work within the timeframe and the project is far from completion. In spite of their national importance and the impact they have on the economic viability of the ROL project, there seems to be inadequate monitoring and supervision by DBKL.

Ekovest being appointed in 2011 as the Project Delivery Partner (PDP) in this joint venture, was also awarded the project worth RM130 million to build a gallery and surrounding facilities at the intersection of the Klang and Gombak rivers.

It is noteworthy that Ekovest has obtained the development order in October 2016 for its EkoGateway @KL River City project, which has a Gross Development Value (GDV) of RM2.6 billion. The project includes the construction of 300 units of 1Malaysia Civil Servants Housing (PPA1M). 

 

In February 2019, the MACC questioned 20 DBKL officers over this project. “They were involved in projects pertaining to cleaning and maintaining rivers in Kuala Lumpur. It is believed that they have been paid off by certain contractors,” a source told a news portal. To-date, pertinent information on the investigation is not readily available.

The shortfall in terms of physical progress in different components of the ROL project along with an overall cost escalation is clearly a cause for concerns for taxpayers. It indicates and raises the following observations:

(ii) lack of pertinent financial information and accountability;

(iv) glaring lack of oversight by the project authorities to ensure compliance with the contract terms, resulting in massive cost overruns; and

These raise the following questions:

(ii) as it becomes reasonably apparent that many work packages are badly behind schedule, some even by six years, were there any:

(b) non-performing contractors and/or project consultants punished or blacklisted by DBKL?

(iv) while the sale of government lands to Project Delivery Partners as well as awarding lucrative government contracts to incompetent contractors took place during the tenure of Tengku Adnan, are there any initiatives taken by the current FT minister to reassess the land value as well as to re-examine the agreements and contracts to maximise government revenue?

(i) a comprehensive audit on the entire ROL project;

(iii) carry out a cost-benefit analysis to determine options which would provide the best approach to achieving benefits while maintaining costs to the minimum; and

In Harapan’s pledge to tackle entrenched corruption, C4 urges immediate steps for access to information for public feedback, greater scrutiny and oversight where sales of government assets and properties are concerned.

 

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