KUALA LUMPUR: The twice-delayed RM343.55 million Paya Peda Dam in Besut, Terengganu, is expected to be completed by a joint venture (JV) of JAKS Resources Bhd and Pembinaan Sujaman Sdn Bhd by June next year, said Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed.

It was reported that the Ministry of Finance had hired JAKS Resources and Pembinaan Sujaman via direct negotiation in 2010.

Nur Jazlan told The Edge Financial Daily yesterday that the contractor is determined to complete the project by next year, although it has been implicated by the Ministry of Agriculture and Agro-based Industry in the delays.

The PAC is following up on the Auditor-General’s (A-G) 2013 report that had described the construction of the RM344 million dam as unsatisfactory for delays and weaknesses which included failing to comply with the environmental impact assessment report. The A-G report also rapped the contractor for failing to comply with the terms of contract despite the hefty price tag.

It was reported that when the project was first announced in 2008, the cost was estimated at around RM200 million, while in Budget 2010 the first-year allocation for the Paya Peda Dam was RM70 million. The dam was expected to be completed by 2013.

Earlier yesterday, Nur Jazlan told a news conference PAC has allowed JAKS to give its version of the story.

“We have to be fair and give them the opportunity. We will consider it as part of our report,” he said.

Nur Jazlan also said the JAKS-Pembinaan Sujaman JV is appealing against the liquidated ascertained damages (LAD) claim that it has been slapped with by the agriculture ministry following the delays.

Based on documents that were made available by PAC yesterday, the ministry had issued a certificate of non-completion (CNC) to the JV and it was liable to pay a fine of RM49,964.94 a day with effect from June 17, 2014.

“The contractors gave us their explanation and if there is a need we may call the consultant who designed the dam [before any decision is made],” said Nur Jazlan.

Jurutera Perunding Zaaba Sdn Bhd was reportedly engaged by the ministry to design the dam. As at June 30, 2014, JAKS’ total borrowings stood at RM600.47 million.

It was reported in April this year that a special committee in the ministry had been set up to investigate the delay in completing the dam.

Agriculture and Agro-based Industry Minister Datuk Seri Ismail Sabri Yaakob was quoted as saying that the investigative committee was established before the A-G’s report was released to the public.

Ismail had also said action had been taken against the contractor, which would have to complete the dam at the latest by June this year.

This article first appeared in The Edge Financial Daily, on October 28, 2014.