DAP, Why the Inconsistency in Adoption of Project Delivery Partner (PDP) in Infrastructure Projects?

Summary: 

Before GE14: 

PDP in projects awarded by BN: NOT OK 

PDP in projects awarded by DAP: OK 

After GE14: 

PDP in projects awarded by BN: NOT OK. Changed to turnkey format 

PDP in project awarded by DAP: OK. No need to change 

In his media statement dated 13 Feb 2012, Tony Pua was critical on the PDP structure in MRT project.  

According to him, “a 6% project fee is almost unheard of in a project of this scale. Based on an estimate that the KVMRT-SBK is expected to cost RM18 billion, the fees to the PDP alone will be RM1.08 billion. This fee will only be reduced if the PDP wins the tender for the underground tunnelling works - in which case the value of the tunnelling works will be excluded from the calculation of the fee.” 

He added, “the structure of the agreement is such that the overall cost of the project is incentivised to be inflated.” 

Ironically, in 2015, the DAP-led Penang State Government appointed SRS Consortium to be the PDP for Penang Transport Master Plan.  

According to Dr Lim Mah Hui, “the selection of SRS as the project delivery partner (PDP) to implement the PTMP was not based on an open tender system, but through a Request-for-Proposal (RFP). 

In an open tender, a client that calls for a tender defines the project with detailed specifications. Parties that submit tenders must then conform to the specifications so that the cheapest tender can be selected. 

However, in an RFP, the tenderers submit different proposals to the client. No two proposals submitted under an RFP are similar, and therefore they cannot be compared. The procurement and negotiation processes thus become more prone to rigging or abuse.” 

Wasn’t the adoption of PDP structure in PTMP inconsistent with Tony Pua/ DAP’s stand on PDP format?  

The confusion does not end here. 

After the change in the government on 9 May 2018, the new government are converting the PDP structure in MRT2 and LRT3 into turnkey contracts.  

According to Tony Pua, “[In PDP] contracts, they get 6% of the cost of the project. The incentive is for the project manager to inflate the cost of the project because it gets 6% of whatever the cost of the project is. So this structure needs to change.”

However, the PTMP by DAP-led Penang State Government will continue to adopt the PDP format in PTMP. (Source) 

DAP, why the inconsistency in adoption of Project Delivery Partner (PDP) in infrastructure projects?