NSC in the soup — again!

Purchase of water chalets irks Auditor-General

Thursday, February 4th, 2010 10:51:00


CONTROVERSIAL: The Legend Water Chalets in Port Dickson — Pic: Hussein Shaharuddin

PUTRAJAYA: Two premium chalets for RM850,000 — and they were never used since 2006!

The Malay Mail learnt that the National Sports Council (NSC) purchased two units of the Legend Water Chalets in Port Dickson without the approval of the council’s board of directors.

This was revealed in the 2008 Auditor-General’s Report. The report suggested “disciplinary action” be taken against officials involved in the transaction.

The purchase of the chalets, installed with jacuzzis and see-through floor panelling with a view of the sea, was not in compliance with the Government Contracts Act 1949 (revised 1973) and NSC Act 1971. The NSC comes under the ambit of the Ministry of Sports.

Section 2 of the Government Contracts Act states:


FLASHBACK: Our report in 2008

“All contracts made on behalf of the government shall, if reduced to writing, be made in the name of the government of Malaysia and may be signed by a minister or by any public officer authorised in writing by a minister.”

Datuk Wira Mazlan Ahmad was NSC director-general from 1993-2005. He was succeeded by Datuk Dr Ramlan Aziz. Mazlan admitted to having purchased the chalets during his tenure.

“I had no ill intentions in buying the chalets. It was for the benefit of the NSC community…from the officials to the athletes,” said Mazlan.

When asked why the Board had no knowledge of the acquisition, Mazlan added: “I had the power (to purchase anything below RM3 million) as vested by the Board to facilitate my day-to-day operations.

“I explained this to the Auditor General’s department and even the Malaysian Anti-Corruption Commission. I’ve nothing to hide. The only ‘mistake’ in this whole transaction was that the management didn’t record it properly.”

The Sports Ministry’s secretary-general, Datuk Mohd Yassin Salleh, also confirmed the purchases and added that they “were not done in a proper manner”.

While not wanting to mention the names of the individuals involved, Yassin said:

“You and I know who were involved and they have been referred to the disciplinary board. Through the mandate of the Minister (Datuk Ahmad Shabery Cheek), I have been appointed as the disciplinary board chairman for this particular case. Letters were issued to the said individuals several months ago to explain the purchase. I’m still waiting for their reply,” Yassin added.

Meanwhile, Section 4(2)(g) of the NSC Act reads that the council is only able to “acquire or purchase or dispose of any movable or immovable property dealt upon such terms as the board deems fit”.

Also in consideration is Section 4(2)(e) of the Act whereby the council can only act “with the approval of the sports minister in consultation with the minister of finance, to enter into equity participation in the development of sporting enterprises, and the provision of sports facilities and attractions”.

It was revealed that the then director-general of the council gave a “verbal” directive to the management director to buy the chalets.

The sale and purchase agreement between NSC and the developers, KL Metropolitan (M) Sdn Bhd, was signed on Feb 6, 2004.

However, there is no evidence showing that the board approved the acquisition. The chalets have not been used since 2006.

Even if the council sold the said property without the knowledge of the board, it would still be deemed “illegal” based on the said Acts.

The Malay Mail visited the resort on Monday but were told to contact NSC in KL for further information on the chalets.

The Paper That Cares also spoke to several sports officials who were, however, in the dark about the chalets.

The Thomas Cup badminton team is expected to begin team building in Port Dickson in April but will be staying at a nearby hotel instead.

“Even if NSC sold the chalets, they had no right to buy it in the first place,” said an official.

“The NSC are fearful of ghosts terrorising athletes in the hostels but the real ‘ghosts’ are those sitting in the offices,” added another official, alluding to a supernatural incident that allegedly took place there recently.

This is not the first time NSC had been ticked off by the Auditor-General. On April 29, 2008, The Malay Mail published an article headlined “NSC’s RM22 million bill raises eyebrows”.

NSC was found to have spent a whopping RM22,335,867 for “professional services, celebrations and hospitality” throughout 2006.

NSC also recorded excessive spending of RM86.55 million under the National Sports Trust Account, exceeding its budget of RM45 million in 2006.

Other issues highlighted by the Auditor-General

The 2008 Auditor-General’s Report also touched on non-completion of upgrading works at the Gymnasium 3 training centre in Bukit Jalil, the national sailing centre in Langkawi, the athletes’ training centre in Gua Musang, the Community Sports Complex in Kepala Batas and upgrading works at the Saujana Asahan Complex in Malacca.

The National Sports Council (NSC) received an approved budget of RM92.80 million for these projects but had spent only RM50.31 million since November 2008.

Also in question is the proposed construction of a bowling alley in Gymnasium 3 which is estimated at RM6.42 million. Sources claim that despite the allocation, NSC “somehow do not have enough funds to carry on with the project”.

The Malay Mail learnt that the bowling alley project was scrapped after a study showed that it was ‘cheaper’ to rent lanes instead of constructing and maintaining an in-house alley.

Rental costs are estimated at RM25,000 a month.

Nevertheless, there are efforts to obtain additional funds from the forthcoming 10th Malaysia Plan (10MP).Also questioned was the consulting architect hired.

The report revealed that Arkitek Juarareka was hired as the main consultants for the Gymnasium 3 project through a memorandum of understanding signed on Oct 11, 2004.

However, Arkitek Juarareka was deregistered by the Architects Board of Malaysia on Jan 1, 2004!

Later, one of the firm’s partners initiated his own firm known as Ismail Hashim Architect.

After the dissolution of Arkitek Juarareka, Ismail Hashim Architect took over the consultancy role under the name of the former and continued to render services with a consultation fee amounting to RM1.88 million.

NSC had paid RM1.33 million to Arkitek Juarareka up to Nov 2008.

The report said:

“The Auditor-General believes that Arkitek Juarareka cannot render its services as consultant after the date of its deregistration as it is no longer legal. Ismail Hashim Architect, meanwhile, is not bound by any formal contract and this raises the risk of NSC in the form of liabilities.”

NSC should have signed a new deal with Ismail Hashim Architect and apparently this was only done on June 16, 2009.

The Auditor-General’s suggestions include the following:

• NSC must plan and scrutinise construction works from the start to ensure there is no repetition of failures or defects, if any.

• NSC must play a proactive role in scrutinising services rendered by the consulting firms to ensure works adhere to required specification, quality and completed within the projected time.

• NSC must check its buildings in detail after construction works to ensure that any damage or works that do not adhere to the required specification will be corrected by the contractor.

• Disciplinary action and surcharge to be taken against officials who are ignorant in fulfilling their duties, including the signing of the sales and purchase agreement of the chalets without the approval of the board of directors, and their failure in adhering to the workings of a contract as stipulated by the government.