Singapore’s Land Transport Authority (LTA) failed to complete the Braddell Road flyover project on time for the 4th time and is now looking at a new deadline of June 2017, some 2 years late of the first deadline in 2015. The real problem behind the failure to meet project deadlines is however LTA’s policy of awarding contract to the lowest bidder.
The Braddell flyover is now undertaken by the second contractor, Feng Ming Construction (FMC), after the first contractor, Hexagroup, went bankrupt. According to LTA, FMC was one of the three bidders for the continuation contract but they were awarded because their S$29.9 million tender submission was the lowest:
“FMC was one of three bidders that met the requirements and was awarded the tender as it submitted the most cost-effective bid at $29.9 million.”
However, a search on the company records found that FMC is related to the first contractor, Hexagroup. The director FMC Lim Hong Beng had co-owned a company, Lim Hong Beng Construction, with Hexagroup director Lim Hong Lam in 1984. Also, the second Hexagroup director, Mr Lim Hong Leong, had served as director of FMC from 1997 to 2006. When interviewed by state media Straits Times if they were relatives, because of their similar names, Lim Hong Beng neither confirmed nor denied the relationship:
“In this industry, a lot of local companies are linked by family ties, but this should not matter as they are completely different entities.”
When LTA was questioned if they were aware of the relationship, LTA defended itself saying the two companies were unrelated at the time of the tender bid:
“Based on records by the Accounting and Corporate Regulatory Authority, Hexagroup and FMC were separate commercial entities with no common directors and shareholders when FMC submitted its tender bid in March 2015.”
State media Straits Times helped defended the government by quoting a lawyer saying cronyism is allowed in government tenders:
“There are no government procurement rules against re-awarding incomplete tenders to firms with family ties.”
