SIX companies awarded 20-year concessions to maintain water treatment plants across Sabah are being scrutinised by the Sabah Water Department.

The contracts were awarded to 58 companies during the previous Sabah Barisan Nasional (BN) administration, said state Infrastructure Development Minister Peter Anthony.

He said the contracts were lopsided as the firms do not need to accumulate liabilities more than RM5,000, since additional expenses exceeding that amount for premises, equipment, pumps, and other costs are all covered by the state government.

Meanwhile, the companies are earning RM186 million per annum.  

“We are presently reviewing their contracts. What I don’t understand is how the previous government could have made a deal obviously favourable to the concessionaires.

“The present market standards on liabilities of the contractors should be above RM30,000 or RM50,000 for one item.

“But the deals were obviously lopsided when they were given RM5,000, and as such it is a waste of taxpayers’ money if the Sabah government has to foot a RM3.2 billion cost,” he told reporters at a special press conference in Kota Kinabalu today.

The contracts could be terminated, Anthony said, as part of a revamp of the Sabah Water Department.

The department is already tainted by the “Sabah Watergate” scandal involving funds allegedly misappropriated by the department’s former heads.

Last year, around RM52 million in cash and valuables was seized in connection with the case.

Anthony said the restructuring of the department will also include reviewing the positions of all district water department engineers, with an engineer from the private sector engaged as the department’s new director, instead of promoting officers internally.

With Amarjit Singh as the director, Anthony said he believed the department would be profitable within the next six to 12 months.

“We believe that the department could help the state government save up to RM1 billion within a year’s time,” he said. – August 27, 2018.