SHAH ALAM, 17 Apr: The Federal Government has been urged to review all methods of granting warrants of provisions to the Public Works Department (PWD) to facilitate the development of a project.
The Executive Councillor of Selangor Infrastructure and Public Facilities, Yunus Hairi, said that the shortcomings do not only affect the smoothness of the continuity of construction work, but gives a negative impact on the cash flow to contractors.
“The weakness in payment that cripples development and cash flow to contractors is unreasonable if it exists in direct negotiation projects because all the details, including construction costs, are known at the outset.
“Similarly with projects that are tendered in the open, indeed the best price is chosen and the government is ready for the price. So it is not appropriate if the same shortcomings happen,” he said when met by Selangor Kini at the compound of the SUK Building Annex Hall yesterday.
Yunus said took the example of the Banting Polytechnic construction project, among the reasons why the construction had to be extended includes the poor payment by the Ministry of Education to the Selangor PWD.
This was clearly stated in the Auditor-General’s 2013 Report in the auditing done on the body from June to August 2013.
The report considers the delay and shortage in payment from the amount recommended based on the assessment of work at the site may have negatively impacted the cash flow of the contractors, thus affecting the continuity of the construction work.
The Selangor PWD, in its response on 13 February to the Auditor-General’s Report, explained the weakness happened because of the warrant of provisions system received in stages (January, April, July and October) complicated the payment process to the contractor.
This happens when the remaining provisions at the PWD are less than the value of work on site when the payment is required to be made.
“The money should be made ready first before a project is mobilised. If finances are not strong, a project has to be delayed and additional costs will certainly occur.
“In the end, it is not only a loss to the people’s money but the economy associated to it after that will also burden the people.It is time the Federal Government reviews this matter to ensure the people people will no longer become victims,” he said.