The ugly side of open tender rearing its head in Sarawak?

A map detailing the package and scope-of-work of the proposed Second Trunk Road project. - File pic // DayakDaily

By DD Observer

THE business community of Sarawak is on the edge of their seats. In a few days time, JKR Sarawak is expected to announce who among the creme de la creme of the Sarawak contractors are qualified to participate in the bidding of project packages for the Coastal Road and Second Trunk Road.

Besides being singularly the largest construction contract jobs in Malaysia, the result of the pre-selected contractors and joint venture partners will also indicate to the business community if the effect of a two-party system in Malaysia has come into full effect as far as Sarawak is concerned.

Prosecutions of the allegedly corrupt have started nationwide, right after a new government took over. If this is any indication of the fate Gabungan Parti Sarawak (GPS) politicians might face should they lose in the next state election (due in 2021), all GPS politicians will now be on their toes, more careful than ever.

If previously they have erred, intentionally or unintentionally, they are keen to redeem themselves now. If previously they were perceived as lazy, today Sarawakians can see them going around voicing their opinions and making sure that projects are carried out in a more efficient manner than before.

If previously “design and build” and “negotiated tenders” were practised, now open tenders are carried out. The mantra for politicians in a two-party system government is “delivery, transparency, honesty and credibility”.

Recently, there was an interesting WhatsApp message making its rounds among the business community in the country. The message was supposedly a ‘leaked’ list of pre-listed contractors allegedly to have been finalised by JKR Sarawak for the Coastal Road and Second Trunk Road projects. The ‘leaked’ list that went viral contained 48 names of contractors who have gone through the stringent selection process. If the leaked list is true, then the 48 contractors will be the chosen ones to participate in the bidding of these projects.

 

Screenshots of viral WhatsApp list of 48 contractors selected for Pre-Qualification Tender.

As previously covered by DayakDaily and Sin Chew Daily, 106 contractors were found to have qualified to participate in the pre-qualified tenders, which will allow them to submit the detailed company information for JKR Sarawak’s evaluation. According to previous interviews with the minister-in-charge, Tan Sri Dr James Masing, JKR Sarawak would pick only about 50 contractors including joint venture (JV) companies to proceed to bid for the 11 packages of bridges and road construction jobs.

However, when the message went viral, whispers in the grapevine has it that there are irregularities which allow contractors selected to collude amongst themselves during the bidding process. While nobody could state for sure if the `leaked’ list is the confirmed list, angry tongues are already wagging about allegations of unfair selections.

With so many contenders and with limited packages, when there are allegations that some companies are unreasonably selected most of the time, this automatically indicates that there are other companies who might have been unethically eliminated.

According to coffee-shop talk, the list of contractors are mostly related companies. While some businessmen do not seem to agree that related companies should be rejected outright, there are others who argued that by allowing the same group of companies to participate in the same tender might lead to higher opportunities for tender bidding collusion.

This, according to some, should not be condoned as 106 companies were qualified to participate in the pre-qualification process.

File pic of companies submitting their documents to be evaluated by JKR, QS department.

A search and a little investigation show that China State Construction Engineering Co. Limited has brought along with them at least two subsidiaries — Sino Road and Bridge Group and China Construction Sixth Engineering Division Corporation Limited.

Two of these companies have formed a joint venture each, another one formed two different joint venture companies with two different local contractors. As a result, the China State group alone has managed to secure 4 spots out of the 48 spots in the leaked list, which will increase their chances of securing the jobs tendered.

No 4. Sino Road and Bridge Group, (formerly known as Hebei Road and Bridge) is also owned by CSCEC.

Based on the tender notices released by JKR Sarawak, one foreign company is only allowed to establish a JV company with one local company. To the contractors who are not selected, if the four companies selected are anything to go by, then it is proof that JKR Sarawak has blatantly disregarded its own criteria.

With just one look at the list, it does not take long for anyone to notice that there are more than one group of related companies participating. For example, Weidasar Sdn Bhd and Weida Works Sdn Bhd are related. Weida Works Sdn Bhd is also related to West Borneo Construction Sdn Bhd. The director of Weida Works is also a shareholder of West Borneo Construction Sdn Bhd.

According to annual report by CSCEC’s, China Construction 6th Division nor China Construction 6th Engineering is a fully owned subsidiary.

If things are not complicated enough, there are also complaints that some local contractors might not have passed the minimum net worth of RM2 million benchmark set by JKR Sarawak. Because the minimum value of each contract is not less than RM400 million, JKR has previously advertised that local contractors who want to be lead contractors will have to have the financial capacity with a net worth of not less than RM2 million.

This is because one of the prerequisites by JKR are to be referred to, like a dictionary for all those who wanna to make it through to tender stage.

Copy of pre-qualifications requirements by JKR Sarawak

Searches under the Companies Commission of Malaysia (SSM) indicated that indeed a few of the companies selected might not have passed the minimum RM2 million net worth mark, and as a consequence, questions as to how these companies be allowed to have come so far to vie for project contract of not less than RM400 million in value.

Example of company 1 that may not make the benchmark of minimum net worth of RM2 million that is rightfully required.

When the dirt was dug deeper, it was also found out that the Minister-in-Charge is not even involved in the tender selection. According to sources, the powerful elimination process and selection of contractors rested solely in the hands of a few senior officials who hold key positions within JKR Sarawak, ostensibly because these are “technical matters”.

List of contractors pre-qualified by JKR Sarawak for water supply and treatment packages for JBALB under Ministry Utilities.

According to another contractor, the list of contractors shortlisted by JKR for Sarawak Water Supply Grid Program under the state Utilities Ministry was too much a coincidence and too identical to the leaked one for coastal and second trunk road projects.

Assuming what was revealed to DayakDaily is true, then this should serve as a wake-up call to all of us that problems engulfing tenders of projects are more than skin deep. More often than not, open tenders are good but manipulated by some within the system. In a two-party system, when politicians are trying to prove their ability and credibility, unseen mastermind and hands might be having a field day, playing their own ‘catch-a-project’ game.

The irony of the matter is when all the tenders closed, contracts awarded and jobs are delayed, the politicians are mostly made answerable to angry taxpayers. While these politicians are labelled as corrupted and got booted out via the ballot boxes, the same mastermind will be sitting in their desks implementing new tenders entrusted by the new government.

This, actually, is also another form of the saying “same wine, different bottle”. — DayakDaily