Govt didn’t get value for money in ERL extension

Govt didn’t get value for money in ERL extension

Computation of compensation claimed by ERL Sdn Bhd does not benefit and protect the interests of government, says Auditor-General's Report.

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PETALING JAYA:
Putrajaya did not get the “best value for money” in the Express Rail Link extension project from KLIA to KLIA 2, the Auditor-General’s (A-G) Report revealed today.

Highlighting several weaknesses in the project in the first of the A-G’s 2015 report, A-G Ambrin Buang noted that no price negotiations were conducted prior to the submission of project cost estimates for it to be approved by the Economic Council (EC).

He also noted that the compensation claimed by Express Rail Link Sdn Bhd (ERLSB), amounting to RM2.9 billion, had yet to be finalised.

“The computation formula of compensation claimed does not benefit and protect the interests of the government.”

Furthermore, the project cost of RM129 million presented by ERLSB in the Value Management lab exceeded the RM100 million cost approved by the EC.

“Thus, the objective of VM for cost savings were not achieved.”

In his recommendations, Ambrin said that price negotiations and the computation formula of compensation must ensure the best value for the government, while benefiting both parties.

The 2.16km extension project has in the past attracted controversy. The project started on July 15 2011 and was scheduled for completion by Oct 31 2012, but it was only completed on Sept 28 the next year.

In 2014, the parliamentary Public Accounts Committee (PAC) questioned why Putrajaya was bearing the cost of the project when it should have been borne by Malaysia Airports Holdings Bhd (MAHB) as the extension is enclosed in the airport’s compound.

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