AG's Report 2015: ERL extension from KLIA to klia2 incurred a RM29m budget overrun

PETALING JAYA: The completion of the ERL extension project from KL International Airport (KLIA) to klia2 exceeded the budget allocated by the government by RM29 million.
The first series of the Auditor-General's Report 2015 revealed that the project cost of RM129 million presented by Express Rail Link Sdn Bhd (ERLSB) in Value Management (VM) lab exceeded the RM100 million approved by the Special Economic Council (EC).
"Thus, the objectives of VM for cost saving are not achieved. Compensation of RM2.9 billion claimed by ERLSB is yet to be finalised. The computation formula of compensation claimed does not benefit and protect the interest of the government," the report said.
The audit was performed from January to April 2015 at the Transport Ministry, Economic Planning Unit (EPU), Public Private Partnership Unit (UKAS), ERLSB and site visits at ERL klia2 in Sepang.
Superintendent Officer (SO) of the project is the secretary-general of the Transport Ministry.
"This project started on July 15,2011 and was scheduled to be completed by Oct 31, 2012. However, it was only completed on Sept 28, 2013," it revealed further.
Amongst the recommendation was for the computation formula of compensation to benefit both parties and not detrimental to the government.
"Price negotiations must be conducted to ensure that the government reaps best value for money. Supplemental Concession Agreement has to be finalised promptly to protect the interest of both parties and cost component of the project submitted to the Value Management Lab must be more comprehensive, detailed and approved by the EC." said the AG's report.