Increased efficiency, transparency in public procurement for the benefits of Sabahans

By Amanda Yeo is Research Analyst at EMIR Research

The recent collapse of a bridge in the interior district of Ranau, never-ending delay in Pan Borneo Highway construction and the issue of the dilapidated schools in Sabah have revealed the failure of the public procurement system in Malaysia.  

Due to inadequate procurement planning and poor drafting of specifications, the poor infrastructure problem persists particularly in the rural area of Sabah – students have to depend on a particular spot to gain internet access for online learning. 

As the bridge is not well-maintained, three students fell and were badly injured. One of them even suffered a fractured leg and was hospitalised at the Ranau Hospital following the incident. 

In addition, the recent Auditor General’s Report 2019 Series 1 on the activities of ministries, federal government departments and federal bodies revealed the Lahad Datu Bypass route package under the Sabah Pan Borneo Highway project was only 37.4 percent completed as on September 21 2019. 

Although the construction for Lahad Datu Bypass route was supposed to be completed on Dec 6 2018, the lack of monitoring and evaluation has affected the project implementation. 

The tender was also found to be wanting in terms of finance, no road construction experience, shortage of technical staff as well as basic plants and equipment. There is an issue of unfinished land acquisition even though the contractor did not comply with the contract terms. 

As a result, Sabahans till today still have to pass through Lahad Datu town when travelling from the district of Tawau to Sandakan. It is relatively time- and cost- consuming for them to travel. 

Moreover, the former Sabah Education and Innovation Minister Datuk Dr Yusof Yacob indicated in April, out of 1,296 schools in Sabah, 589 were classified as dilapidated. 

This shows the school maintenance work remained under progress. As contractors with sketchy financials were appointed, 91 dilapidated schools in Sabah were classified as dilapidated Scale 7 schools that were unsafe to occupy. 

Meanwhile, till today, the construction of three public schools in Selangor is yet to be completed. As shown under Dec 1 parliamentary reply, the progress for SMK Bandar Saujana Putra, SK Bandar Saujana Putra and SJK (Tamil) Heawood stood at 95.8 percent, 45 percent and 42 percent respectively. 

As the contractors did not manage to complete based on the expected time frame, the Education Ministry had to re-tender, wasting millions in taxpayer funds. 

Therefore, it’s time for the current administration to follow the United Nation Convention of Anti-Corruption (UNCAC) framework, allowing the public and stakeholders to monitor compliance with the procurement rules and advocate the initiative from the previous Pakatan Harapan administration by drafting a Public Procurement law to prevent abuse of power. 

According to The Organisation for Economic Co-operation and Development (OECD), public procurement refers to the purchase by government and state-owned enterprises (SOEs) of goods, services and works. 

As public procurement accounts for a substantial portion of the taxpayers’ money, the government is expected to carry it out efficiently and with high standards of conduct to ensure high quality of service delivery and safeguard the public interest. 

To establish an open and transparent procurement process, both the federal and state government will have to work together, ensuring the public procurements are carried out for the benefits of Sabahans. 

The policy recommendations are as follows: 

  1. Enhance the technology-based procurement system (e-perolehan) by adding restrictive functions towards procurement that does not adhere to financial procedure. By incorporating technology to deploy cutting-edge procurement practices, it helps optimise processes and improve strategic outreach; 
  2. The stipulated clause regarding Liquidated and Ascertained Damages (LAD) and Service Level Agreement (SLA) has to be enforced on the contractor to avoid delays in imposed charges. This would protect Government’s interest in all projects/contracts involving Government, Statutory Bodies and SOEs. In the case of any breach of contract(s), the Government can at any given time, terminate or/and file a civil suit against the party who breaches the contract;
  3. Need a solid and robust governance framework that limits the power of Minister(s), Government officials and officer bearers. When the ministers did not interfere with the methods of procurement and companies that will be awarded the contract, the civil servants can perform their duty by following procurement rules and process, ensuring best value for money besides providing due diligence to the process and outcomes; 
  4. Establish the need for the procurement, draft relevant specifications and award criteria, choose the appropriate procurement method, prepare the necessary tender documents, set a budget ceiling and undertake research on market prices and on the availability of goods and services required and of suitable suppliers and contractors; 
  5. Ensure all client department and regulators to carry out projects based on the advice and recommendation provided by the Technical Department such as the Public Works Department (JKR) and related technical agency;  
  6. Introduce checks and balances mechanism in procurement dealings with the involvement of Integrity Unit and Internal Audit Officers; 
  7. Allow outside observers such as representatives from the Auditor General’s Office or the Malaysian Anti-Corruption Commission (MACC) and relevant business organisations to attend procurement board meetings; and
  8. Require procuring authorities to issue notice before negotiation takes place and when they finally award the contract to the appointed contractors/suppliers. 

Although the government has promised to implement 184 construction projects and install tube well water supply for schools in rural Sabah and Sarawak as well as the construction of the Pan Borneo Highway Sabah from Serusop to Pituru under Budget 2021, greater scrutiny on the procurement process is essential to encourage any actors involved in the procurement process to abide by procurement rules. 

By advocating efficiency and transparency in public procurement, the construction projects in Sabah can be completed on time, letting Sabahans to enjoy better bridge, road and school facilities around the state. 

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