KUALA LUMPUR – Putrajaya paid RM499.18 million to a concession company labelled 107423-H for maintenance services despite the company not presenting a full key performance indicator (KPI) report as required in a contract agreement for the implementation of the Government Integrated Radio Network (GIRN).
According to the auditor-general’s (AG) 2020 report, the agreement between the government and concessionaire stated that payments for maintenance would be made after certain KPIs had been achieved and its monthly KPI reports were presented to the relevant government agencies.
However, following an audit on the KPI reports by the concessionaire for January 2019 to October 2020, two out of five parameters – handover between cells and data throughput – were listed as non-available.
“Nevertheless, audit checks regarding payment instructions revealed full payments were made to the concessionaire for January 2019 to October 2020 amounting to RM499.18 million.
“Of that, RM476.41 million comprise claims from February 2019 to October 2020 made under an agreement titled MSF-3. The agreement was yet to be signed,” the AG’s report read.
Feedback from the National Security Council (NSC) said that the administration of this concession contract was not able to be managed in an organised manner given the staff involved constantly changed.
Additionally, the NSC said the oversight could have occurred as there was no committee to verify the work done by the concessionaire for the payments concerning maintenance services.
Meanwhile, the AG’s report showed that an RM2.5 million rebate was not imposed despite incomplete KPI reports by the concession company.
Under the agreement, if the performance of maintenance services by the concessionaire in the period of one month falls 10% below the minimum performance level, the government reserves the right to slash rebates by 0.5% on the amount paid.
But despite the two “unavailable” KPI parameters, the AG reported that no rebate cuts were made.
“The rebate that was supposed to be cut from the payment to the concessionaire amounted to RM2.5 million,” the report said.
Other discrepancies showed that the concessionaire claimed RM23.51 million for insurance, which was not part of the agreement.
According to the report, payments relating to insurance policies were to be borne by the concessionaire itself.
“Audit checks found the NSC paid RM23.51 million for January 2019 to October 2020 for insurance claims to the concessionaire. However, there are no copies of the insurance claim sent to the NSC as proof required under the agreement,” the report added.
Meanwhile, the government made payments of RM150.19 million for other expenditures concerning maintenance that could not be verified.
These included payments for diesel generators (RM8.94 million), helicopter rentals (RM90,000), and claims for the value of depreciation of assets (RM14.42 million).
Regarding payments for diesel, the concessionaire informed NSC that 56 out of 505 generator sets were listed as being used every day for 24 hours.
Nevertheless, the amount paid for the use of diesel was for all 505 generators valued at RM8.94 million for the period of January 2019 to October 2020.
Visits in February 2021 to six locations found the generators unused and on standby, given the area concerned has electricity supply.
Meanwhile, the payment for helicopter rentals was made without proof of the transaction presented to the NSC.
GIRN is a strategic national project implemented via a strategic private-public partnership between the federal government and a concessionaire known as 107423-H via an agreement signed in January 2007. The project was developed to provide effective network communication abilities for enforcement authorities.
The NSC was tasked to supervise the development of the project and make payments for work and services provided. – The Vibes, November 2, 2021
