121 infrastructure projects to continue after cost reduction of RM805.99 mln

KUALA LUMPUR: A total of 121 infrastructure projects valued at RM13.93 billion nationwide offered through direct negotiations and limited tenders by the Barisan Nasional government will continue after price negotiations by the Pakatan Harapan government resulted in cost savings of RM805.99 million.

These exclude mega projects such as the Light Rail Transit 3 ( LRT3) project costing RM31.65 billion and Mass Rapid Transit 2 ( MRT2) project costing RM39.35 billion, each was lowered to RM16.63 billion and RM30.53 billion, respectively.

The total costs saved from both projects amounted to RM23.84 billion.

The Ministry of Finance ( MoF) said this followed the June 29, 2018 announcement on several initial steps sought to improve the governance of government procurement and the country’s financial management, including reviewing projects offered on limited tenders and direct negotiations by the previous government.

“Based on the review, the government decided to undertake open tenders for limited tender and direct negotiation projects that have not yet been issued Letters of Acceptance (SST).

“In the meantime, for 121 limited tender and direct negotiation projects that had been issued SST, additional agreements will be finalised at the end of March 2019 after the prices are re-negotiated as a rationalisation of the project costs, while reducing pressure on the government’s fiscal position,” it said in a statement yesterday.

“Now all the details will be dealt with by the respective ministries that handle the projects and will not involve the MoF anymore.

“Mindful of the current developments, the MoF is confident that the implementation of the government’s procurement through open tender in the near future will provide the best cost and value- added benefits to the government and the people.

“The old method of awarding contracts is maintained, but the only difference is that open tender is conducted to replace direct negotiation or limited tender award practice except for emergency factors, specific expertise needed or special reasons.” — Bernama