KTM Update: Allegations of corruption in Komuter ticketing revamp

TRANSIT noted the recent allegations of corruption in the revamp of the KTM Komuter ticketing system, and recent news reports that the Malaysian Anti-Corruption Commission (MACC) was investigating KTMB.

The company that was awarded the tender was alleged to be “inexperienced and underqualified” [TRANSIT: As if that has never happened before in Malaysia. Just look at the most recent Malacca Tram project announcement.] Their bid for the project was RM85 million, which was higher than two other more experienced competitors.

At this time, current Minister of Transport Kong Cho Ha has indicated that there is no reason for the revamp to stop, despite calls from NGOs that the ticketing revamp be suspended for at least 6 months to give the MACC time to investigate.

TRANSIT Says:

More nonsense involving KTMB – but would we be wrong in suspecting that, once again the issue is actually above the level of KTMB management and probably related to the Board of Directors or persons within ministries who pushed for this “inexperienced and underqualified” company to get the contract.

As we said above, it is not as if this has not happened before – with KTMB and with other projects – in Malaysia.

It is a pretty standard scam: approve or push the directors to award a project to an inexperienced “RM2” company at an inflated contract price, and pocket kickbacks from the company in return for the contract.

The company awarded the contract (which might include among its directors, relatives of those making the contract decision), would then subcontract the main contract out to a more experienced company, pocketing the difference. That subcontractor might do the same, and the contract would continue down the line until there were no more available subcontractors.

TRANSIT believes that our Wakil Rakyat need to stand up and ask the Minister of Transport publicly to explain how the revamp can be allowed to continue while the MACC investigation is taking place. Not to mention, we need a serious investigation into conflict of interest.

But why would the wakil rakyat do that? After all, many of them are seriously involved in conflict of interest situations on a regular basis – all the way from the councillors who own construction or advertising companies, to the many MPs who are also serving as ADUNs (or vice versa).

For more information on the MACC investigation, read the article below:

MACC to quiz railway staff over RM100m deal (Malay Mail)
Tuesday, January 11th, 2011
Muzliza Mustafa

PETALING JAYA: A number of witnesses, including Keretapi Tanah Melayu Bhd (KTMB) officers, will be called up by the Malaysian Anti-Corruption Commission (MACC) soon to assist in its investigation into the RM100 million shoddy contract deal allegation.

The contract was alleged to have been awarded to an “underqualified” company to revamp the ticketing system for KTM’s 56 Komuter stations in the Klang Valley and Negri Sembilan.

MACC investigations director Mustafar Ali told The Malay Mail that its investigation team is studying the documents it seized from KTMB.

“The witnesses will be called up after we have studied the documents.”

It is learnt the KTMB offices have been raided twice by MACC officers since December in connection with the award of the contract, with the latest raid carried out last Friday.

The team seized several documents which, according to an online portal, included technical scoresheets.

The portal had reported a local company won the award with a RM85 million bid even though there were lower bids by companies with more experience in servicing the KTMB systems.

It was alleged the technical evaluation processes were rigged to accommodate the capabilities of the selected company.

According to the portal, the tender notice was published and announced on Aug 3 last year and submissions were closed on Sept 29. It said KTMB’s technical team did not conduct any site visit or request demonstrations by the tenderer, as required.

There was also no evaluation of the tenders of the five companies that were shortlisted.

The portal said the two companies with existing projects involving the ticketing systems were rejected although they had put in bids of RM69.8 million and RM72.6 million, respectively.

It is understood the tender was awarded based on a policy of 15 per cent bracket of the estimated budget for the project. A RM100 million project would mean the bracket would only enable companies with bids of 15 per cent above or below the budget being awarded the contract.

This automatically disqualified the other two companies who offered lower bids even though they had more experience in the field.

TRANSIT Says:

Scam, scam, scam, scam, scam. And while the public lobs allegation of corruption and incompetence at KTMB staff, it becomes ever clearer that there are people high above in the decision making with their own agendas, that are trying to make things happen.