Government lost RM27 mil from delay in PUSPAHANAS project - Audit Report

The National Defence Education Centre (PUSPAHANAS) development project in Precint 1, Putrajaya which was to have been completed on Oct 23, 2014, was delayed for 282 days due to the contractor's poor performance.

According to the third series of the 2014 Auditor-General's Report which was released on Monday, the delay of the RM99 million project has caused the government to bear the cost of the project amounting to RM26.87 million due to the devaluation of land value.

The report revealed that, based on the Audit visit on July 2015, the contractor assigned, Syarikat Awan Megah Sdn Bhd (AMSB), was late in submitting a recovery plan through a new Critical Path Method.

Based on feedback to the National Audit Department on Sept 29, 2015, the Defence Ministry had ordered AMSB to provide a recovery plan based on the unsatisfactory project's performance.

"According to the recovery plan submitted by AMSB on Aug 25, the company had agreed to complete the project on Feb 29, 2016," it said.

The ministry said according to the review made on the AMSB recovery plan, it was found that the project's progress as of Sept 15 was 76.83 percent.

Commenting on the implications of the proposed termination of the AMSB contract, the ministry said such action at this time would be detrimental to the government as the land ownership had been transferred to the company on Jan 12.

"Given the long-delay, the project director had on Aug 4, recommended the project be brought to the consideration of the Sick Projects Committee," the ministry said adding that it was constantly monitoring the performance of AMSB.