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Management Of Delayed/Sick Projects

Management Of Delayed/Sick Projects

a. The Development Division under the Prime Minister’s Department (PMD) is responsible for monitoring the implementation of all development projects (physical and non-physical) which have been approved for various Departments/Agencies by the Ministry. The Division plans, coordinates and monitors the allocation and expenditure as well as project implementation in accordance to the stipulated rules and procedures. In addition, the Division is also responsible for giving advice regarding issues with implementation on development projects to various Departments/Agencies. To ensure the progress of these projects is in line with and ahead of schedule, numerous initiatives have been prepared to achieve its goals. Any issues and problems raised pertaining to the project have been highlighted periodically towards PMD‟s management through its Development Action Committee forum. In addition, various strategies have been implemented which includes the production of Fortnightly Notes, Strategic
Alliance, Roundtable Meetings with Central Agencies as well as site visits on all delayed and problematic projects. The Ministry has distributed development funds for project implementation purposes to Departments/Agencies under the Ninth (RMKe-9) and Tenth Malaysia Plan (RMKe-10). The allocations were distributed according to yearly project implementation and in addition, there were projects that have been implemented through the Private Finance Initiative (PFI) scheme.

b. Audit performed between September 2015 to April 2016 revealed that the monitoring of delayed/sick projects were satisfactory especially in terms of the frequency on project site visits, termination against original contractors and the appointment of saviour contractors. As a result, 6 delayed/sick projects have been successfully completed, another 2 projects were under construction and the remaining 2 projects were still in the re-tendering process. However, in terms of managing or tackling any delayed/sick projects, there were several planning and implementation issues that need improvements as follows:

i. 3 out of 6 delayed projects were imposed with Liquidated And Ascertain Damages (LAD) amounting to RM1.55 million;

ii. weaknesses in selection criteria of contractors i.e. less attention given on contractor’s experience and capability which affected projects implementation performance;

iii. delay in project submission by Public Works Department (PWD) to the client/user agency
causing Defect Liability Periods to decrease by 150 to 584 days; and

iv. delay in the issuance of Notice of Termination of Employment Contract for 5 projects between 25 to 66 days from the date of Notice For The Purpose of Termination.

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