A CONTRACTOR’S failures cost Putrajaya more than RM1 billion in losses and two plots of land in a Johor project, a special audit report on Defence Ministry land swaps has shown.

The report found “weaknesses and negligence” in the selection process for developers, leading to the project’s collapse.

“The bond issue and poor project management caused the project to fail, and led to the government losing its land,” said the report by a committee headed by former auditor-general Ambrin Buang.

“The Economic Planning Unit (EPU) also failed to take action against the developer several times despite being told about its inability to complete the project.”

The report proposed that the government proceed with a suit against the developer.

The development project was first signed in July 1997. The contractor was supposed to build an army camp in Skudai in exchange for 154.6ha of land at Tebrau camp and 28.9ha at Penggawa camp in Plentong.

The project was targeted for completion in June 2001, but drawings for it were not finalised until 22 months later.

The ministry repeatedly asked EPU to cancel the project as the developer encountered financial difficulties and could not complete Skudai camp, but the requests were rejected.

The government finally ended the contract in April 2011, and sued the developer in February 2017 for RM1.48 billion.

The amount sought by the government included the land bond at RM256 million, performance bond (RM12.8 million), difference between the land value and land bond till May 2015 (RM37.4 million), maintenance fee for the camps (RM9.5 million), construction costs for new and temporary camps (RM1 billion) and liquidated ascertained damages for the January 2013-May 2011 period (RM149 million).

Former defence minister Hishammuddin Hussein has urged Putrajaya to probe into the land-swap deal involving the camps in Plentong and Tebrau.

He said the losses suffered by the government in the deal are far higher than those of the 16 land swaps recently exposed by the ministry. – May 18, 2019.