In the report, Auditor-General (A-G) Ambrin Buang noted these as some of the weaknesses of the Dairy Cluster Project, under the Department of Veterinary Services Malaysia (DVS).

The project is aimed at reducing the country’s dependency on imports of fresh milk by establishing local dairy clusters under the supervision of anchor companies and DVS.

The project, implemented in 2011, cost RM709 million, with the government funding a maximum 30% of the project while the anchor companies fund the rest.

The A-G’s report also revealed that as of March 2016, the number of dairy cattle and milk production was still low and would be unable to achieve the projected objective of increasing Malaysia’s milk sufficiency from 2% to 5% by year 2020.

Other weaknesses identified in the audit included a reduction in the number of dairy cattle due to death, theft, loss or being sold and unutilised cold chain equipment as well as some dairy cattle unable to breed.

Another weakness was incomplete clauses in contract documents, such as details of the total project cost, targets for the creation of new jobs and increase in number of dairy cattle.

The A-G recommended the DVS to review its method in determining the most suitable approach to increase the number of dairy cattle with optimal cost and selecting the most capable and committed farmers to ensure continuous dairy cattle breeding.

“DVS and anchor companies should enhance the monitoring on procurement management of pregnant and infection-free dairy cattle, the retraction, death, loss or sale of dairy cattle, effective usage of cold chain equipment and recording system for assessing the performance of the dairy project.”

The A-G also said the DVS should ensure milk tankers and the milk quality laboratory are promptly utilised due to cost implications and to ensure the government received value for money.