Audit report exposes contract weaknesses in Malaysian Army vehicle deals
The audit highlighted delays, unclaimed fines, and improper procurement practices involving RM7.8 billion worth of armoured vehicle contracts.
Key findings from the report include a two-year delay in the delivery of 68 GEMPITA vehicles by a local contractor, resulting in an overdue fine of RM162.75 million.
The government had already paid RM7.52 billion despite the contractor missing deadlines.
Additionally, the RM53.93 million performance bond was insufficient to cover penalties.
Maintenance and spare parts delays for GEMPITA, ADNAN, and PENDEKAR vehicles led to unenforced fines of RM1.42 million.
The report also criticised small-batch procurement by Responsibility Centres (PTJs), bypassing open tender rules for purchases exceeding RM500,000.
The Defence Ministry cited Movement Control Order (MCO) disruptions as a cause for delays, but auditors stressed that timely enforcement of penalties could have mitigated losses.
The AG recommended structured contract timelines and centralised approvals for ad hoc procurements to reduce governance risks. – Bernama
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Borneo Post
7 days ago
- Borneo Post
Tamu Desa to be expanded in Sarawak, says minister
Ewon speaks during the press conference at Pasar Sungai Apong in Kuching today. – Photo by Mohd Faisal Ahmad KUCHING (July 30): The Ministry of Entrepreneur Development and Cooperatives is looking to expand its Tamu Desa initiative in Sarawak this year, with discussions to be held with the state government to determine priority areas and implementation mechanisms. Minister Datuk Ewon Benedick said the expansion follows positive feedback and the successful rollout of 39 projects across Sarawak in 2024, involving a total allocation of RM7.8 million. 'This year, we will hold discussions with the Sarawak government, specifically with Deputy Premier Datuk Amar Awang Tengah Ali Hasan, to identify new locations and coordinate project implementation,' he told a press conference during a visit to the upgraded Pasar Sungai Apong here today. 'We've already received applications from four Sarawak Members of Parliament requesting that Tamu Desa projects be implemented in their respective constituencies, especially in rural and remote areas,' he added. The Tamu Desa initiative, introduced in 2024, is designed to upgrade, refurbish, or construct new community markets, particularly in underserved areas of Sabah and Sarawak. For 2025, the federal government has allocated a total of RM20 million under the national budget and an additional announcement made by the Prime Minister Datuk Seri Anwar Ibrahim during the Madani Rakyat programme in Tawau last May. 'This year's funding is the same as last year – RM10 million through the 2025 Budget, and RM10 million more announced by the Prime Minister. We aim to ensure continued implementation of these projects in both Sarawak and Sabah,' Ewon said. While the initiative originally focused on rural areas, Ewon said Sarawak's approach last year included markets in urban centres and areas under local authorities such as municipal councils. 'In Sarawak, some of the projects involved existing markets like Pasar Sungai Apong. Based on our discussions last year, the state government felt there was also a need to upgrade existing market infrastructure, and I agree that this should continue,' he said. He added that before finalising new projects, the ministry would consult with the Deputy Premier to ensure alignment with state development plans and secure a list of proposed sites. When asked whether most of the proposed markets would be in rural or urban areas, Ewon said proposals have been received for both types of locations. 'The four MPs who submitted requests included locations in the interior. I believe these areas also deserve to be prioritised, but the final decision will come after discussion with the state government,' he said. Separately, Ewon said the ministry also held a consultation session today with Sarawak government representatives on the proposed amendments to the Cooperatives Act. The session included participation from senior Ministry of Entrepreneur Development and Cooperatives officials, the Malaysian Cooperative Commission, Sarawak Deputy Ministers, state assembly members, and civil servants. 'We presented the proposed provisions of the new Act, and Sarawak has submitted its views and suggestions. This is part of our nationwide engagement process. 'We aim to table the new Cooperatives Act for first reading in Parliament at the end of this year, followed by second and third readings in the March session next year,' he said. Ewon said the new Act will focus on strengthening cooperative operations and enhancing the role of the Malaysia Cooperative Societies Commission as the main regulatory agency. Also present during the visit were Sarawak Deputy Minister of International Trade, Industry and Investment, Datuk Dr Malcolm Mussen Lamoh; Ministry of Entrepreneur Development and Cooperatives secretary-general Dato Sri Khairul Dzaimee Daud; and Kuching South Mayor Dato Wee Hong Seng. Ewon Benedick expand Tamu Desa
New Straits Times
29-07-2025
- New Straits Times
Keris Strike exercise draws growing international interest, says army chief
LENGGONG: The Keris Strike Exercise, now in its 30th edition, continues to attract growing international attention, reflecting the success of Malaysia's long-standing multilateral military cooperation programme. Army Chief General Tan Sri Muhammad Hafizuddeain Jantan said this year's exercise saw the participation of observer officers from Thailand and Japan. "This shows that after more than 30 years, the exercise continues to gain recognition and trust from our partner nations. "It also reflects growing international confidence in this joint training initiative. We aim to involve more countries as observers in the future," he said following the final assault and closing ceremony of the Keris Strike Exercise Series 30/2025 at Felda Lawin earlier today. The exercise featured a live-fire drill conducted at the Tanjung Hantu Firing Range yesterday, involving the Malaysian Army's ASTROS II Multiple Launch Rocket System and the U.S. Army's HIMARS system. Muhammad Hafizuddeain said the event was made more significant with the presence of Sultan of Perak, Sultan Nazrin Shah, and Raja Permaisuri Perak, Tuanku Zara Salim. "It was a great honour for our armed forces to have Their Royal Highnesses witness the live-fire exercise. I'm fully satisfied with the level of readiness shown by the participating troops, especially during the final assault phase, which marked the climax of the exercise. We can confidently say the objectives of this joint training have been met," he said. He also addressed issues raised in the recent Auditor-General's Report (LKAN) 2/2025 regarding non-compliance in contract management, confirming that the National Audit Department is reviewing procedural lapses in one of the Army's earlier projects. "These will be rectified. Moving forward, we will be more vigilant and ensure contract managers pay closer attention to compliance and collection matters," he said. Last week, Auditor-General Datuk Wan Suraya Wan Mohd Radzi revealed significant weaknesses in procurement and contract administration for Malaysian Army armoured vehicles between 2020 and 2023. One of the key findings was the government's failure to collect RM162.75 million in late delivery penalties from the main supplier of the 8×8 GEMPITA armoured vehicles, despite the contract ending in December 2022. – BERNAMA
The Sun
29-07-2025
- The Sun
Keris Strike Exercise gains global traction with Thailand, Japan observers
LENGGONG: The 30th edition of Malaysia's Keris Strike Exercise has reinforced its reputation as a key multilateral military initiative, attracting observer delegations from Thailand and Japan for the first time. Army Chief General Tan Sri Muhammad Hafizuddeain Jantan highlighted the exercise's expanding global appeal during the closing ceremony at Felda Lawin. 'This reflects three decades of trust-building with partner nations. The presence of international observers validates our joint training framework,' he said. The week-long drill culminated in a live-fire demonstration at Tanjung Hantu Firing Range, featuring Malaysia's ASTROS II rocket launchers and the U.S. Army's HIMARS systems. The event gained ceremonial significance with Sultan Nazrin Shah and Raja Permaisuri Perak Tuanku Zara Salim attending. 'Their Royal Highnesses' presence honoured our forces. Troops displayed exceptional readiness during the final assault,' Muhammad Hafizuddeain noted. Addressing recent scrutiny, the Army Chief acknowledged audit findings on contract mismanagement in armoured vehicle procurement. The National Audit Department is reviewing lapses in a 2020-2023 project, including uncollected RM162.75 million penalties from a GEMPITA supplier. 'We are rectifying procedures to strengthen compliance,' he assured. – Bernama
