Baggage Handling System at KUL

[KK Lee 5]

RM165.3mil for 'unused' baggage handling system Aidila Razak

1:05PM Oct 25, 2011

 

A series of delays and cost revisions bumped the cost of a baggage handling system linking KL Sentral and the KL International Airport up by 78.9 percent of its original estimate.

 

Worse still, the Auditor-General's 2010 Report notes that the RM165.3 million system, which was completed in March 2008, is yet to be put to use, with passengers still not able to collect their bags at KL Sentral.

 

The report notes that this was because of "commercial and legal issues" involving Malaysian Airport Holdings Bhd, Express Rail Link Sdn Bhd and Malaysia Airlines System.

 

Among others, the auditor-general found that the Ministry of Transport's decision to ignore a directive for a limited tender had pushed cost, which had already risen by 41.8 percent from 2001 to 2002, by a further RM34.3 million in 2005.

 

"If the ministry had followed the decision made by the Finance Ministry in the letter dated Feb 21, 2003, or followed through with the stipulations in the letter by the Deputy Prime Minister's office, the cost would have stayed at RM131 million," the report says.

 

It notes that the project was to include both a system that connects KLIA with KL Sentral as well as an upgrade of the current baggage handling system.

 

It was awarded to Siemens through direct negotiations in 2001, at a ceiling price of RM184.75 million.

 

However, the company's planning and pre-project engineering study found that it could only complete the works at RM345.9 million, a whopping 87 percent higher than the ceiling price.

 

As such, the Ministry of Transport proposed that Siemens completes the system linking KLIA and KL Sentral at its estimate price of RM92.40 million, while the upgrading would be tendered to five other companies.

 

Ministry of Transport ignored directive?

 

This was agreed upon by the Finance Ministry in July 2002, but further meetings between the Transport Ministry and Siemens bumped the cost to RM131 million (including a provisional sum) by November 2002.

 

However, this was disputed by the Finance Ministry in February 2003, with a letter from the Deputy Prime Minister's office in the same month instructing that the project be put through a limited tender process.

 

"However, the audit finds no progress on the project between March 2003 and April 2005, with no evidence that the instruction for a limited tender was carried out," the report notes.

 

It adds that the Transport Ministry did not take any action during the same period, and had only sought permission from the Finance Ministry to approve the RM165.3 million figure in June 2005.

 

"If the appointment of the contractor did not take so long, significant hikes in project costs could have been avoided," the report says.

 

In its explanation, the Transport Ministry said the cost overrun was due to amendments to specifications, including the need for more electricity supply to meet the needs of the Airbus A380 obtained by MAS in 2007.

 

"The (project study) did not take into account changes to the building to serve the needs of the Airbus A380, which was then not in the fleet," it said.

 

It blamed "difference in job scope", including the new size of baggage trays to provide for different types of baggage, such as golf bags, and several other amendments.

 

Changes in exchange rates between the Euro and the ringgit were also blamed for the increase in cost. The AG found this to cost RM1.57 million.

 

Maintenance costs ongoing

 

The ministry also explained that the system was in fact in use, but only for check-in from KL Sentral to KLIA.

 

It states that a committee had been set up, consisting of MAHB, MAS and ERL Sdn Bhd representatives, with a goal for the system to be fully running by 2012.

 

However, the report notes that besides the deadline, there is no time-line given for the committee to sort out the issues based on their plans.

 

The report stated that among the disagreements are who would pay for insurance for damage to baggage, with ERL Sdn Bhd refusing to foot the bill as it would raise ticket prices.

 

While the dispute is being sorted out, MAHB continues to pay RM30,000 in maintenance costs to Siemens.

 

"It is strongly recommended that the (Transport) Ministry takes immediate action to ensure the 2012 goal is met so that no further wastage of public funds occurs," the report says.

 

http://www.malaysiakini.com/news/179609