SEDC explains delay in completing hotel’s new wing
KUCHING: Sarawak Economic Development Corporation (SEDC) has attributed the delay in the construction of the new 18-floor new wing of Riverside Majestic Hotel mainly to the previous contractor and foundation issue.
SEDC chairman Tan Sri Datuk Amar Dr Abdul Aziz Hussain said the issue with the foundation was only discovered after SEDC had acquired the property, which had in turn caused the project period to be inaccurate as extra works needed to be done.
“There was a delay but the delay is not actually caused by the SEDC. It was caused mainly by the previous contractor and because of the foundation. We have some problem with the foundation and we (only) found out after we have acquired the property.
“I’m not saying that this is the only issue but it is the main issue,” he told reporters after the signing of Memorandum of Understanding (MoU) with UDA Holdings Bhd for potential property development ventures in the future, here yesterday.
He was commenting on the Auditor- General (AG)’s Report that found the management of the new 18-floor new wing of Riverside Majestic Hotel construction project ‘unsatisfactory’.
In an audit that was conducted between November and December 2016, the AG found the management of the construction project not satisfactory because it was not completed even though seven extensions of time (758 days) were approved for the contractor to complete the project.
“The construction cost of the hotel had increased by RM8.07 million or 13.5 per cent of the original project cost,” the AG said in the first series of the AuditorGeneral’s Report 2016 published on July 31.
Additionally, the AG pointed out that the liquidated and ascertained damages ( LAD) were not imposed on incomplete work period of 148 days, besides stating that the term of the performance bond was not extended and there was no new additional contact for new work.
On the rise in cost of the project, he explained that the increased cost wasn’t because of the delay but rather due to a change in the scope of works.
“The increase in cost isn’t because of the delays, but because there is a change in the scope of work.”
He went on to list that the addition of the bridge and the upgrading of the hotel from a three-star hotel to a five- star hotel were among the main changes in specifications for the project.
“So actually it’s a lot (changes in specifications), with different specifications the price will also be different. The opening will be in September (this year), it is almost completed with only finishing touches left. So it should be okay.”
I’m not saying that this is the only issue but it is the main issue. Tan Sri Datuk Amar Dr Abdul Aziz Hussain, SEDC chairman