AG’s report questions award of VEP contract

03 Dec 2018 / 20:03 H.

KUALA LUMPUR: The Auditor-General’s Report 2017 Series 2 has questioned the manner in which the Vehicle Entry Permit (VEP) system between Johor and Singapore was implemented in 2015.

The report, which was tabled in Parliament today, questioned why the RM149.45 million collection charges system was awarded through direct negotiations instead of an open tender.

Former prime minister Datuk Seri Najib Abdul Razak was said to have been given assurances by former transport minister Datuk Seri Liow Tiong Lai that the contractors were capable and had the expertise required for the project.

However, it was later learnt that the contractors had no experience in the field. The contractors were also found to have only RM35.54 in their accounts instead of the required RM2.3 million.

It was reported that the contractors had produced written evidence that they had RM3 million in their account and gave an understanding that they would bear the project cost until the system went operational two months after its launch.

The project involved two separate contracts, namely Capital Expenditure Contract (Capex) worth RM45.15 million and Operational Expenditure Contract (Opex) worth RM104.3 million.

The contractors were found to have sub-contracted out the Opex to a third party, despite not being allowed to do so.

Other weaknesses found were that the equipment worth RM4.07 million such as barrier gates, cameras, and fix readers were left uninstalled.

The audit concluded that there were weaknesses in the selection of contractors for the project which affected the effectiveness of the collection system.