Focus View
Announcing project cost before a tender is wrong
FocusM team | 13 Oct 2017 00:30
The government wants major public sector projects to be awarded via the “anonymous” tender process for greater transparency. 

This should be lauded. Any move towards increasing transparency in government is welcome as it can lead to enormous cost savings for taxpayers. However, is this new policy the panacea in resolving the award of big government projects? 
 
In the past we have experienced instances where large projects did not go through any tender process or where tenders were not given to the lowest bidder. There was the perception the taxpayer has never gotten optimal benefits from tendered projects. 

With a switch to the anonymous version, does it mean favouritism had prevailed when previous tenders were not anonymous? Is it an indication that the open tender process was flawed?
   
 The anonymous tender process was introduced for the Mass Rapid Transit (MRT) project. The fact that the MRT project was completed on schedule and more importantly, below budget, indicates the anonymous tender format is the way to go.

The anonymous tender process undeniably stops allegations of favouritism. As the name itself implies, it leaves no trace as to the identities of those who tendered for a particular project. The tender submissions do not even reveal the name of the company. 

But anonymous or otherwise, the authorities should be careful when it comes to the pre-tender process. The East Coast Rail Link (ECRL) project is an example. The value of this project, which stretches almost 700km from Gombak, Selangor to Tumpat, Kelantan, was already made public even before tenders were called. 

The government estimation puts the cost at RM55 bil to RM70 bil. How were the figures arrived at? Perhaps a potential bidder may have wanted to bid for say, only RM40 bil? 

Similarly, the government said in July, the cost of the High Speed Rail project linking Kuala Lumpur and Singapore was estimated at RM50 bil to RM60 bil. Interestingly, a listed company had proposed the same project in 2006 for just RM8.5 bil.     

This anonymous tender policy should not be a case of “one step forward and two steps backwards”. Don’t announce any estimations until the tender process is over. 

Let those interested tender for a project according to their own cost estimates.