KUCHING: The overall performance of State Financial Secretary Incorporated (SFS Inc) in the management of the state’s government investment in Sarawak International Medical Centre (SIMC) in Kota Samarahan is deemed unsatisfactory by
the National Audit Department.
This is based on an audit carried out between January and March 2015.
In the Third Series of the 2014 Auditor-General’s Report that was released yesterday, it was found that the objective of implementing the SIMC project by Sarawak Specialist Hospital & Medical Centre Sdn Bhd (SSHMC) — a subsidiary of SSHMC Management and Holdings Sdn Bhd wholly-owned by SFS Inc — had not been achieved and the delay in completing the SIMC project had caused development cost to increase to RM534.38 million.
Other observations included weakness in asset management by SSHMC in SIMC and the Settlement Agreement did not protect the interests of the state government.
In view of this, SSHMC has been recommended to review and reassess its management and activities between its board of directors and SFS Inc to determine the direction of the company in order to get a return on investment.
“SFS Inc, through the state government, should conduct negotiations with the federal government on the sale of SIMC to the federal government as soon as possible,” said Auditor-General Tan Sri Ambrin Buang in the report.
It was also recommended that SFS Inc scrutinise and monitor agreements prepared and signed by its subsidiary with other
parties in order to protect the interest of the state government.
“SSHMC should take action to identify medical and non-medical equipment that are not in use or obsolete in SIMC so that further action can be taken as soon as possible and also to give the registration numbers to assets presently used by the tenants to facilitate the identification and tracking of assets,” he remarked.
SSHMC was established to manage the construction, maintenance and administration of SIMC, which was the state government’s long-term vision to make it the medical centre and tertiary hospital that provides medical services to residents of Sarawak, Sabah, Brunei and Kalimantan as well as a regional medical hub in Southeast Asia.
Though the construction project was approved and launched in 1998, construction work only started in July 2003.
The project was financed through capital injection amounting to RM50.50 million from the state government with the purchase of 50.50 million ordinary shares of RM1 each as the state government’s equity in SSHMC and the Istisna’ Serial Bond worth RM425 million, which was issued in Sept 2004.
The turnkey contract was offered to a consortium consisting of Sesco Engineering Sdn Bhd and Vamed Engineering GmbH & Co. KG on Dec 20, 2002, with a total contract value of RM374.12 million, a total of RM214.11 million with additional Euro36.30 million for specialist medical and IT equipment and consultancy fees amounting to RM18.45 million, which would add up to the total development project cost amounting to RM390.15 million. This amount includes the cost of installation of electricity and water supply amounting to RM16.02 million.
The contract period was for 36 months starting from July 15, 2003, to July 14, 2006.
In 2005, the cost of SIMC’s development project was revised from RM390.15 million to RM453.24 million so as to take into account the cost of expected structural changes, higher cost of Euro and other costs.