IDEAS Media Statement

For immediate release

Investigate shocking PAC revelations for corruption

Kuala Lumpur, 28 October 2014 – The revelation today by the Parliamentary Public Accounts Committee (PAC) that Universiti Malaysia Terengganu (UMT) wrongly procured the construction of its research vessel, costing RM14.39 million of public funds, is shocking and requires immediate investigation for corruption. Reports today revealed that the vessel, originally meant to help the university conduct oceanography research, has to be downgraded now as a mere cargo ship as it does not meet technical requirements.

The problem of irresponsible procurement is a recurring problem that we continue to observe in many public institutions today. It is not enough to merely attribute this to carelessness and incompetence, since this is a clear example of a conflict of interest. The director of the winning contractor was in fact also a shareholder of the company that issued the certificate of approval for the vessel, RV Discovery.

IDEAS in our research project promoting transparency in public procurement has called on the government and all agencies many times to publish all contracts publicly, whether carried out via tender or direct negotiation, as this would allow for greater public scrutiny. This is a gross wastage of public funds that must be accounted for.

Second, specifications for goods must be clearly spelled out – in this case, it is unclear as to whether these even existed. We have also recommended many times that there should be independent monitoring of the procurement process. In this case there was clearly extremely poor and weak monitoring of the contracting of the research vessel, where expert technical advice would have come in useful.

Finally, all public agencies should consider implementing Integrity Pacts (IP), which compel bidders and government representative to disclose any conflict of interest. If terms of the written agreement are violated, both parties would receive disciplinary sanction.

I also want to congratulate YB Datuk Nur Jazlan Muhamed, Chairman of the PAC and IDEAS Council member, for his leadership to ensure the PAC functions properly.

Wan Saiful Wan Jan
Chief Executive

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