Why was RM654 mil Socso project tendered via direct negotiation – M. Kula Segaran

Explain increase from RM500 mil previously, says former human resources minister

THERE must be more clarity on why a RM654 million project was given a direct tender, which begs the question if any abuse or corruption practices took place.

In an answer to my question in Parliament, the Social Security Organisation’s (Socso) National Neuro-Robotics and Cybernetics Rehabilitation Centre was given permission for procurement through direct negotiation by the Socso board mainly in order to “save time”.

This is highly questionable. Large projects that go through a direct tender tend to involve corruption due to the large amounts of money involved.

When I was the human resources minister in 2018, this project was only valued at RM500 million. Back then I ensured that Socso procured government land so that it would be much cheaper, and we had numerous engagements with the Perak State Economic Development Corporation (SEDC) and finally procured the land at New Meru Town ship, in Ipoh. All of this was done transparently and openly.

This RM654 million tender was done during the Perikatan Nasional reign, after the Sheraton Move caused the Pakatan Harapan government to fall.

So, I ask the Human Resources Ministry, explain why the sudden increase. What additional costs have you incurred, what additional facilities are you building with that extra money?

Also, let us know why an open tender was not carried out. As minister, I had called that this project must go through an open tender.

When you carry out a direct tender for such a massive project, you shun the chance for fair and equal opportunity among contractors. This lack of competition raises questions about whether the selected contractor was indeed the best choice and if other potential contenders could have offered better services or cost-effective solutions.

You also limit the public scrutiny and oversight that open tenders provide. How will the public and relevant stakeholders access the bidding process, ensuring fairness, and preventing any potential corruption or favouritism?

By a direct tender, we lose the opportunity for innovation and cost savings as open tenders encourage different contractors to offer their unique solutions, promoting innovation, cost-effectiveness, and overall better value for money. This lack of exploration can lead to suboptimal outcomes for the rehabilitation hospital project and potential waste of funds.

I urge the ministry or Socso to answer my questions in a statement to explain to the public their decision on going with a direct tender and to pay so much more for this project.

Under the Malaysia Madani policy framework by Prime Minister Datuk Seri Anwar Ibrahim, which propagates accountability and transparency, I feel this tender must be relooked at and its cost trimmed down. This was done many times during the Pakatan Harapan government where we relooked at tendered projects and found ways to save money by trimming down excessive costs.

– The Vibes, May 27, 2023

*M Kula Segaran is Ipoh Barat MP. The above is his response to a parliamentary written reply from the Human Resources Ministry dated May 24, 2023. The written reply was in answer to Kula Segaran’s question to the ministry to state the above project’s tender price, when the tender was carried out, if it was an open tender, and to explain why if it wasn’t.

In its written reply, the ministry said the Socso board on February 23, 2022 had given approval for direct negotiations which concluded on April 1, 2022. The reasons for direct negotiations and for the RM654 million project value were to save time on a complex and high-tech project which required specialised equipment.