Finance Ministry: Is Common and OK if main con does not pay the sub con in government projects. Do you agree?
I have received not less than 6 complaints from contractors who have done some work for the construction of hostels and drainage for University Teknology Petronas in Tronoh, Perak (UTP).
They are all sub contractors. All are chinese. It was through the “sub and sub” kind of matter that they obtained some work from the main contractor.
Five of the complainants failed to get payment for the work done from A company. I wrote a letter of complaint to UTP. Then 5 sub contractors were offered settlement by paying part of the sum owing to them as full and final settlement. The reason given, I was told, due to financial difficulties. Is more like a TAKE IT OR LEAVE IT. The subcontractors did not want to go through the lengthy court process and accepted the offer. This incident was months ago.
Again, last week, when I was in the Parliament, I received a call. Again, a subcontractor complained that he was not paid by the main contractor and the sum owing to him is over RM 22,000.He did some drainage work in UTP too.
Yesterday, when I called him to confirm if he has received any payment, he said no. He further said that he has gathered a few more complaints for me which are similar to his situation ie sub contractor + work done at UTP + not paid by main contractor. The complainant told me, the total sum owing is approximately RM 100,000.
In my hand, I was also having some documents on a project under the Ministry Human Resources and the sub contractor was not paid despite he has obtained a judgment in court. The sub contractor obtained the project from a company which a YB Senator from Perlis is a Director.
Yesterday, I grabbed the opportunity in the Parliament to highlight the problems of these sub contractors who are not paid by the main contractors for work done. During the debate of the allocation to the Finance Ministry I asked how did the Ministry choose or approve contractors who are so irresponsible and fail to pay the sub contractors. I further added and said that the sub contractors also need to feed their family. I said, the government should lead by example as these are government’s project.
Also, there was an incident where the foreign workers were not paid.
Can you imagine, the Deputy Minister, Tengku Putera Tengku Awang replied was that they (Finance Ministry) have nothing to do with the subcontractor of the projects. It is under the jurisdiction of the respective Ministries. He also advised the sub contractors to be careful before taking a project from the main contractor. ( what projects from a main contractor would be the safest if it is not a government project. Further, the economic slowdown, do you have many choices?)
I stood up and told him not to push his responsibilities. In fact, in the Auditor General Reports it was reported that the Finance Ministry in some projects was also asked to approve for the contractors selected by the other Ministries.
He avoided answering my questions and went on personal by saying that “inilah sikap pembangkang”. (this is the behavior of opposition) when I kept persisting for accountability.
When the House was adjourned, I walked over to the Deputy Minister and tried to make him understand the problems faced by the sub contractors and the Finance Ministry need to do something about it.
The Deputy Minister said, “Ini biasalah” (meaning, it is normal for main contractor not paying the sub contractor) . I told him, “tak boleh macam it” ( it should not be the way). They are government projects and also another project given to a company which a YB Senator is a director.
He further asked, “ Kerja sudah siap ke?” At that point of time, I thought, perhaps, there is a chance of getting assistance from the Ministry because all work were done and completed by the sub contractors. Happily, I said, “Siap.”
I was shocked when he said, “Oklah”. Another UMNO MP who was standing beside him said, “this is civil action”.
I am so disappointed and upset. I want to help the subcontractors. They have done the work for the government. Not the main contractors. But, the money was paid to the irresponsible main contractors. These responsible sub contractors could not get the projects direct because they are not a bumiputra.
Legally, the contract is between the sub contractor and main contractor. Would you want to go through the court process (though you know, you sure win) when at the end of the day, most likely you will be getting a paper judgment only.
Further, I am trying to also highlight the weaknesses in the selection of the contractors for the government projects. That is why you find so many projects are delayed, poor workmanship, qualities, exceeded the approved allocation and also ABANDONED.
After the exchanges with the Deputy Minister, I felt really sad. He knows is happening, he also thinks it is ok to continue to happen. In brief, it gives me a feeling, it is fine for the main contractor not to pay the sub contractors for work done in government projects. It is like a “skim cepat kaya” for the main contractors with approval from the government.
Poor sub contractors. How can I assist further? Advising them to proceed to court is not a good option. I want to help them. But, I feel helpless under this system.
Getting more and more paper judgements to show to the income tax people as excuses not to be able to pay more tax may sooner or later reach the widower and if he’s any better, he will take action to persuade his people that Islam Hadhari will be debased if such parasitism and exploitiveness are not arrested. We are not a very honourable society, so people have no sense of shame, only entitlement because it is their country, no pride in their work and results of their work. It reflects on our creed practice, ethics, character, manners and outlook. Some subcontarctors control the bank account of the main contractor who signed all blank cheques in advance after getting their commissions up front.
Comment by Vox Populi — October 29, 2005 @ 8:40 am
You have to ask the PAM (Architech association), Surveyor and Engineer Insitution to readdress the contract. Recent Engineers Insitute has a article on sub-contractor getting his payment for work done. In fact many Consulting Engineers are not paid or the last to be paid by the developer.
Comment by omo — October 29, 2005 @ 11:06 pm
I think you have done a commendable job by raising the matter in Parliament. And again following it up later with the Deputy Minister. I see real effort to address people in difficulty within the overall framework and objective that you are fighting for. I think, the name of that main contractor should be released. This could make it be accountable to public scrutiny and inquiry. It would lead the Finance Ministry to be more selective and diligent in future undertaking…
Comment by Denise Wahlenberg — October 30, 2005 @ 2:56 pm
Hi,
Maybe the minister is right
“He also advised the sub contractors to be careful before taking a project from the main contractor.”
Will your party then maintain a public database of contractors who have not paid their sub-cons? Perhaps once these guys cannot find anyone willing to take work from them then the rest will see that it doesn’t pay to screw a sub-con.
You can either hope the government ministers will do something (fat hope since they don’t make anything and it doesnt win votes) or you can be part of the solution.
Far better to light a candle than to curse at the dark. Name the contractors at least so that its a matter of public record.
Comment by Maobi — October 31, 2005 @ 2:36 pm
They probably supported the BN folks during the Election in order to get the sub-contracts but they came to you to complain
C’est la vie!
Comment by ZhuCF — November 4, 2005 @ 6:43 pm
Last general elections, BN failed to pay vendors for their paraphenalia.
Comment by humanly — November 12, 2005 @ 8:19 pm
Well as a lawyer yourself, what is your thoughts on this matter legally? As far as I know, sub contractor’s are not employed by the principal. Yes it shall be a civil suit and i personally think that this matter should not be raised in parliament. Btw, are these sub-contractors paying their income taxes ar?
Comment by Tk.aun — November 13, 2005 @ 1:30 am
Dear Po Kuan,
Forget about the laws of Malaysia on this. It must be changed. As is the subcontractor has no rights of action to even progressive payments. It is also very common to find the principal and main contractor to be of identical personalities though of different entities; then with the concept of “pay when paid” how could the subcontractor ever get anything if the principal and the main contractors conspire to maintain that no payment was ever made and received? As a YB, you should work on the change. For pointers look at the recent amendments to the Singapore laws on building contracts.
Comment by Malaysian Chinaman — November 16, 2005 @ 5:05 pm
well you really cant do much coz we have to be careful of who we are dealing with government, private sector or public sector. things like these go on but if you are careful enough then you will be able to know who to and who not to deal with. partly it is the governments fault because they just simply give it to the main contractors without checking their financial background etc. but mainly its the sub contractors fault for not being careful. true things like these go on but thats how life is. the government should have a body to check who to and who not to give contracts to as it will effect the economy and people will not trust government contracts unless paid beforehand. money talks…..
Comment by unknown — March 27, 2006 @ 9:14 pm
Regrading to the topic, i am feel angry with the main contractor which mostly are malay. I used to work with my father, who is house painter. The main contractor(malay)always pass job to sub contractor (chinese). Malays will earn enormous amount of money by just give 60 percent money to sub contract. Can you imagine 100 thosand ringgit contract money by 40 thousand had been spend to a fellow without doing any stuff? Not all chinese are rich. We have learn to adapt to such enviroment but it doesn’t mean we should obey or follow some unfair rules or regulations. I am chinese student from Univeristy Teknolgy Petronas.
Comment by jeff — September 9, 2007 @ 8:42 pm