DESPITE having shelled out RM55.81 million for project management and engineering consultants, University Malaysia Sarawak (Unimas) still has to deal with shoddy workmanship.

One of the its hostels, Kolej Sakura, has yet to be issued a certificate of fitness for occupation, though it has been inhabited since December 2005.

There were also numerous leakages in the university, and its server was placed in a room where it was exposed to heat and moisture.

These were among the findings of the 2007 Auditor-Generals' Report.

"The design of the building is inappropriate with shoddy work, serious leakages and exposed sanitary pipes. The next phase has to be planned carefully and supervised diligently.
"The development and asset management division of Unimas has to play a more effective role in supervising the project management consultants and engineering consultants responsible for the project as they are paid a high fee, amounting to RM55.81 million," said Auditor-General Tan Sri Ambrin Buang.

In reply, Higher Education Minister Datuk Seri Khaled Nordin said the hostels were designed based on the apartment concept.

"The engineering consultants were of the opinion that the automatic fire-detection system and manual electric alarm were unnecessary.

"Further discussions with the Sarawak Fire Department were held a few times. Based on the discussions held on June 25, the Fire Department will consider this matter after receiving the full report from the engineering consultant."

The leaks, said Khaled, were caused by water-proof layers that came off during cleaning. Unimas has ordered the cleaning contractors to stop using high capacity pumps in those areas.

The contractors, he said, have also been told to ensure the waterproof layers would last for 10 years, as was stated in the contract, while the server and hub have been moved to a special room.

On Bank Pertanian Malaysia, Ambrin noted it had not been successful in reducing its non-performing loans (NPLs).

In 2006, its NPLs amounted to RM671.16 million or 46 per cent compared to the targeted 35 per cent.

In 2007, its NPL was RM631.37 million.

"The bank did not conduct proper investigations over the financial standings of the borrowers before disbursing loans. Branch officers also failed to take legal action against defaulters and dishonest borrowers.

"It should set up a system to detect high risk loans and reschedule repayment for borrowers who face difficulty in settling their loans.

"They should also make sure that their state offices obey instructions issued by the head office so that legal action is taken against defaulters of six months and above.

"Disciplinary action should be taken against officers responsible for collecting defaulting payments but failed to do so."

The three state branches with the highest NPLs are Kelantan (56.7 per cent), Federal Territory (16.2 per cent) and Perak (10.9 per cent).

In reply, Agriculture and Agro-based Industries Minister Datuk Mustapha Mohamed said a merit-demerit evaluation system was started in June to ensure better performance of loan supervisors.

Ambrin also found weaknesses in the Malaysian National Film Development Corporation (Finas).

"For example, the acquisition of equipment through tender for four units of digital betacam recorders worth RM 710,000 was made only through an acceptance letter but no contract was signed. It took between 15 to 45 days for two contracts worth RM35.23 million to be signed.

"There was also no written delegation of powers from the Minister to the Finas director-general to sign a RM29.98 million dollar contract."

In July 2007, Finas director general signed a contract worth RM29.98 million. The Government Contracts Act 1949 provides that a government contract has to be signed by the Minister himself or an officer to whom power was delegated to.

"The Finas director-general is only given powers to sign contracts worth RM5 million and below, therefore the contract should have been signed by the Minister or an officer he delegated power to. But there was no proof of such delegation of power," said Ambrin.

Replying to this, Unity, Culture, Arts and Heritage Minister Datuk Seri Shafie Apdal said this happened before powers were delegated under Section 2 of the Government Contracts Act, which took effect on March 18 this year.