SENIOR transport correspondent Christopher Tan's commentary ("Infrastructure projects: Lowest bid = Highest risk?"; last Thursday) strikes at the heart of financially troubled construction companies failing to complete big infrastructure contracts awarded by government agencies.
He rightly lays emphasis on the tender evaluation process, saying that awarding contracts to the lowest bidder in the majority of cases is questionable, given the number of failed contracts by several construction companies that have conspicuously marked our construction landscape in the last couple of years.
I had previously questioned the wisdom of awarding a $40 million contract to Hexagroup when its finances were insecure ("Any checks on bidders for construction projects?"; Jan 22).
The joint reply by the Land Transport Authority (LTA) and Building and Construction Authority (BCA) ("Checks in place to assess contractors' financial status"; last Wednesday) is reassuring but does not address the larger issue of how to prevent future infrastructure projects stalling because of contractors' cash-flow problems.
Failed infrastructure projects have meant costly delays and inconvenience to the public, a scenario quite out of sync with our avowed adherence to strict regulatory and closely monitored tender processes.
The LTA and BCA have remained silent on why Hexagroup was awarded the big contract in 2012 when it had allegedly not submitted profit and loss statements after 2007.
Complying with financial requirements provides transparency and an assuring indication that contracts would not go awry.
Awarding Hexagroup the contract raises the possibility that transparency has been side-stepped in favour of "value for money".
The problem of non-performance of infrastructure projects by several construction companies calls for a revamp of our tender processing system so that delays can be minimised while credibility in our systems and procedures are enhanced.
With infrastructure engineering a vital component of our development strategy, the need to have and enforce effective controls cannot be overemphasised.
V. Subramaniam (Dr)
He rightly lays emphasis on the tender evaluation process, saying that awarding contracts to the lowest bidder in the majority of cases is questionable, given the number of failed contracts by several construction companies that have conspicuously marked our construction landscape in the last couple of years.
I had previously questioned the wisdom of awarding a $40 million contract to Hexagroup when its finances were insecure ("Any checks on bidders for construction projects?"; Jan 22).
The joint reply by the Land Transport Authority (LTA) and Building and Construction Authority (BCA) ("Checks in place to assess contractors' financial status"; last Wednesday) is reassuring but does not address the larger issue of how to prevent future infrastructure projects stalling because of contractors' cash-flow problems.
Failed infrastructure projects have meant costly delays and inconvenience to the public, a scenario quite out of sync with our avowed adherence to strict regulatory and closely monitored tender processes.
The LTA and BCA have remained silent on why Hexagroup was awarded the big contract in 2012 when it had allegedly not submitted profit and loss statements after 2007.
Complying with financial requirements provides transparency and an assuring indication that contracts would not go awry.
Awarding Hexagroup the contract raises the possibility that transparency has been side-stepped in favour of "value for money".
The problem of non-performance of infrastructure projects by several construction companies calls for a revamp of our tender processing system so that delays can be minimised while credibility in our systems and procedures are enhanced.
With infrastructure engineering a vital component of our development strategy, the need to have and enforce effective controls cannot be overemphasised.
V. Subramaniam (Dr)
