Six 12th Malaysian Plan Development Projects Face Implementation Issues - LKAN

KUALA LUMPUR, Oct 5 (Bernama) -- Six development projects under the 12th Malaysia Plan faced implementation issues, including contract terminations, prolonged extensions of time (EOT), delays and completed housing projects that remained unoccupied, according to the Auditor-General’s Report (LKAN) 2/2026.

The six projects comprised two Armed Forces Family Housing (RKAT) projects, the Galeria Perdana upgrading project in Langkawi, a People’s Housing Programme (PPR) project and two fire station quarters projects in Sabah.

The RM100 million Joint Task Force 2 (ATB 2) RKAT project at Kukusan Camp, Tawau, Sabah, originally scheduled for completion in July 2024, achieved only 28 per cent physical progress as of Dec 31, 2024, before its contract was terminated on May 23, 2025.

According to the report, the Ministry of Defence project was granted two EOTs totalling 418 days before termination due to the contractor’s poor financial management and failure to carry out the works diligently, resulting in site activities coming to a halt.

As of July 30, 2026, the Public Works Department (PWD) had prepared tender documents for the appointment of a completion contractor, while an additional RM3.90 million for the project was approved by the Ministry of Economy on Aug 6, 2026.

Meanwhile, the RM63.25 million Air Force Base Quarters (RKAT) project in Labuan was granted four EOTs totalling 467 days up to 2025, followed by two additional EOTs totalling 410 days in 2026, with the completion date extended to Nov 17, 2026.

The report stated that as of July 30, 2026, physical progress stood at only 51 per cent against the scheduled 54 per cent, with delays attributed to factors including a shortage of skilled workers and the need to source raw materials from outside Labuan.

For the RM20.40 million Galeria Perdana Upgrading Project in Langkawi, the contract was terminated on Sept 23, 2024, after four EOTs totalling 192 days had been granted, with Liquidated and Ascertained Damages (LAD) amounting to RM440,000 imposed for a 136-day delay.

The audit found that the project was handed over to PWD in January 2025 for further action, while the estimated cost of completing the project increased by RM36 million to RM56.40 million. The tender process for appointing a completion contractor is expected to be held in February 2027.

Meanwhile, all 67 units under the RM23.70 million PPR project in Kampung Selagon, Beaufort, which was completed in 2017, remained unoccupied as of July 2026 due to structural damage caused by ground movement.

Thirteen units suffered severe damage, while a RM2.72 million contract for the demolition and reconstruction of eight units and repairs to five others was mutually terminated on March 11, 2025, after physical progress reached only 15 per cent.

The RM14.39 million Semporna Fire and Rescue Station quarters reconstruction project was also terminated on March 11, 2025, after being granted five EOTs totalling 1,164 days.

At the time of termination, physical progress stood at only 25 per cent, with RM2.83 million already spent.

According to LKAN, the project was terminated due to the contractor’s financial incapacity, failure to carry out the works according to schedule, and weaknesses in project management and monitoring.

A retender was advertised in June 2026, and the project is currently at the tender evaluation stage.

Separately, the RM6.85 million Merotai Fire Station and quarters construction project was terminated on Nov 5, 2025, despite having achieved 96.6 per cent physical progress, after seven EOTs totalling 1,075 days had been granted.

In light of the findings, the Auditor-General recommended that the relevant ministries and departments take immediate action to ensure the projects are completed, enabling the development objectives to be achieved and the targeted groups to benefit from the projects.

-- BERNAMA