Saturday, August 19, 2017

BARU BIAN: HDC SUIT AN OPPORTUNITY TO EXAMINE AUDITOR GENERAL’S REPORT IN DETAIL


PRESS STATEMENT
19 AUGUST 2017

One of the flats in PermyJaya which was said to have been painted last year
I refer to the statement by the Chairman of the Housing Development Corporation that they are likely to take legal action against me for allegedly distorting the facts of the AG’s Report 2016, thereby ‘aggravated the image of HDC’. I fully welcome this novel initiative by the Chairman, as the trial will provide full opportunity for all parties to delve deeply into the facts of the matter and examine in full the details of the unsatisfactory findings of the AG in the Report. We may be presented with the chance to request for better and further particulars of each instance of unsatisfactory finding.

Our Miri MP Dr Michael Teo and Wanita deputy chief Voon Shiak Ni had made numerous site visits to the flats in Miri mentioned in the report for which RM2.88 mil was paid for painting and repairing works found not executed, or carried out defectively or not done in accordance with the requirements of the job scope. The flats are in bad condition and some parts are even cracking up and chipping off. There are real problems on the ground and the Chairman should direct his energy towards rectifying these and improving oversight rather than threatening the opposition with legal action.

Interestingly, it was reported today that the MACC had arrested 2 HDC staff in connection with the failure to carry out the painting job. Obviously, the MACC must have had reason to believe that the HDC was implicated in this impropriety, otherwise they would not have carried out these arrests. Therefore, the Chairman is jumping the gun to protest the HDC’s innocence. On our part, we welcome the investigations by the MACC and stand ready to assist in every way possible.

The HDC’s challenge on firstly, the AG’s Report, and now, the MACC’s investigation, is an eye opener on the Housing Commission’s defiance of the statutory duties of the institutions clothed with the power to check on accountability and integrity of public spending, abuse and misuse of power and corrupt practices by the public authorities.

At the press conference on 3 August 2017, the findings of the AG that I pointed out had had also been highlighted by the media. The other items found to be unsatisfactory can be seen in pages xvi-xviii and 94-125 of the AG’s Report. I would request the MACC, if they have not already commenced doing so, to investigate every other item of unsatisfactory performance that is documented in this report, including but not limited to:

i.        No prior approval of the State Financial Secretary obtained for exemption from established financial procedures for several transactions;
ii.       An advance payment of RM16.80 million for Package 1 and Package 2 of the Jalan Utama upgrading project in Sibu without authorisation, resulting in the government incurring interest charges of RM1.77 million;
iii.       Payments amounting to RM33.40 million were made by HDC to suppliers without being verified by an authorised officer: supplier invoices for 3 progress payments amounting to RM10.33 million were not original but were unacknowledged copies; 4 progress payments amounting to RM2.30million not supported by suppliers invoices from the contractor; six payment vouchers amounting to RM20.77 million were also not supported by payment certificates.
(See pg xvii of the Auditor General’s Report)

In particular, with respect to the painting job paid for but not carried out or carried out insufficiently at RPR PermyJaya mentioned above, it was found that the performance of several items specified in the contract were unsatisfactory, ie:
i.          Jet-spray cleaning of external walls, posts and beams not carried out;
ii.         Repainting of cracks on external wall not carried out;
iii.       Applying one coat of primer and 2 coats of weather resistant finish on the rainwater drainage pipes and service pipes: no pipes installed for rain water drainage;
iv.        Replacement of sewerage, waste and vent pipes not carried out;
v.        Applying one coat of primer and 2 coats of weather resistant finish to outer walls, pillars, beams and walls: thin uneven paint applied. Walls on ground floor and parts of first floor staircase not painted;
vi.    Replacement of timber roof fascia and painting thereof: no replacement done, just painting of rotten/broken fascia boards.
(See Table 5.18 at pg 117 of the Auditor General’s Report)

We urge the MACC to investigate fully all these findings and bring those responsible to account if there is evidence of wrongdoing, especially since this involves a large sum of taxpayers’ money.

It is rather disingenuous of the Chairman to suggest, in the context of this threatened suit, that the HDC is merely in charge of opening tenders to contractors and disclaiming any responsibility for the highlighted shortcomings, and at the same time assuring the MACC and the public that the HDC is committed to upholding transparency and accountability, and pledging to assist the MACC in their investigations. Perhaps at the board meeting of the HDC, the board should obtain sound legal advice on the consequences of breach of statutory duties, misfeasance and breach of fiduciary duties before they make any decision. It would be best if their attempts at damage control be directed at their internal procedures and controls rather than at shooting the opposition for merely highlighting their shortcomings as revealed by the Auditor General.

The Chairman doth protest too much, methinks.

Baru Bian
Chairman, KEADILAN Sarawak / ADUN N81’ Ba’ Kelalan

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