May 19, 2010

Tun Mahathir : Punish all in Sime Darby fiasco

Tun Dr Mahathir Mohamad today said action should be taken against all those involved in Sime Darby Berhad’s cost overruns for the Bakun project and not just chief executive Datuk Seri Ahmad Zubir Murshid.

PETALING JAYA: Tun Dr Mahathir Mohamad has claimed that the cost overruns in the Bakun project were almost RM1.8bil and said the responsibility for the Sime Darby fiasco should be shared.

"The Bakun hydro project was given to Sime Darby and a Chinese partner at RM1.8bil. Now, the CEO has been dismissed because of cost overruns in the project, amounting to RM900mil.

"But I believe, and Sime Darby can correct me, the overruns are more than that because the Government has already compensated Sime Darby with about RM700mil.

"So the total cost overruns would be almost equal to the bidded price of RM1.8bil. The price has been doubled," Dr Mahathir wrote in his blog, chedet Wednesday.

"How come the bid is so low? I would think the engineers would know that they would not be able to build at RM1.8bil. Who are the consultants in Sime Darby? How come they okayed such a low cost for the project?" he asked.

He said the responsibility for the overruns should be shared: "Is it only the CEO who was responsible? Who are the others who were involved with the project and failed to see that the cost overruns were very high and the project has been delayed by almost three years.

"I think responsibility should be shared. I was told of this cost overrun and delay three years ago," Dr Mahathir wrote.

Meanwhile, Sime Darby chairman Tun Musa Hitam told a news portal Wednesday that he would quit if required to, in wake of the conglomerate's huge first-quarter losses.

"When I have made my own assessment, if necessary, yes, I am prepared," he said.

He added, however, that it was up to the shareholders to decide whether board members should also be made to resign.

Last week, the board asked president and group CEO Datuk Seri Ahmad Zubir Murshid to take a leave of absence, prior to the expiry of his contract in November this year.

This came after Sime Darby reported RM964mil in cost overruns from projects, including the Bakun dam project, racked up during his tenure.

Prime Minister Datuk Seri Najib Razak said last week there would be no cover-up of any weaknesses or losses at Sime Darby.

The cost overruns were discovered by a board work-group assessing the corporate governance and performance of Sime Darby's energy and utiliies division.

No comments: