PUTRAJAYA — August 3, 2017: All tenders for government projects remain subjected to review by the Ministry of Finance’s (MOF) Procurement Committee before being awarded.
This is irrespective whether the contracts involved open tenders, direct negotiation or limited tenders, and regardless of which minister or the prime minister signing off on the approval.
“So even if there is a letter with the prime minister’s signature or minister’s directive, it still goes to the committee and we will follow the standard operating procedures,” said Treasury Secretary-General, Tan Sri Mohd. Irwan Serigar Abdullah, during a question-and-answer session with the media on the Auditor-General’s Report 2016 First Series here today.
Irwan was asked if the government intended to limit direct tenders after the report highlighted several delayed projects, including Bera Hospital in Pahang.
The report, tabled in Parliament on Monday, calls on the Public Works Department to appoint a reliable new contractor to complete the work and also to ensure that the existing structure does not suffer from material deterioration.
Replying to a question, Irwan direct negotiations are preferred to save time, cost and enhance efficiency. But direct negotiations have been decreasing in percentage. “We are now going more for open tenders.”
Last year, 59.57 per cent of government contracts were awarded via open tender and 39 per cent through direct negotiations. The balance was awarded through limited tenders.
Asked why government revenue fell from RM219 billion to RM212 billion, he clarified that it was due to the sudden decline in oil prices for three years from 2014.
“When the government introduced the Good and Services Tax (GST) in 2015, we succeeded in collecting RM42.6 billion. While many criticised the GST, if not for it the country could have gone bankrupt.
“If anyone says the GST can be abolished, then the country will be in a lot of trouble. The fall in revenue was due to oil but we believe in diversifying the economy.
“In 2014, we were dependent on oil, at almost 41 per cent of government revenue. But when we implemented the GST and undertook a lot of rationalisation, the dependence on oil dropped to just 14 per cent. That is the government’s success,” Irwan emphasised.
He also said the government had undertaken a number of cost saving measures in respect of expenditure and succeeded in saving about RM5 billion.
“So we will retain the GST at six per cent but will make a lot of changes in respect of the tax collection.
“Now we are checking if those companies which had requested for an exemption from the Inland Revenue Board have fulfilled the Key Performance Indicators in respect of investments, job opportunities offered as well as research. Are they after operating, fulfilling these criteria?.
“With this change, our economy will expand well throughout the year. It is hoped that 2017 will be good for the economy. The first two quarters of the year recorded growth of 5.6 per cent and 5 per cent respectively and it is hoped government revenue will improve,’ said Irwan.
To another question, Irwan described how Malaysia’s Mass Rapid Transit (MRT) project had helped Malaysia retain its A- credit rating with Fitch Ratings.
“When Fitch Ratings came, I took them to the Tun Razak Exchange. I went 40 feet underground to show them the MRT station and highlighted that we are equivalent to developed nations. They were very impressed and immediately said (to me) that we would maintain our A-rating,” he said. — Bernama