MCCY will not seek to recover S$13 million in waivers of contractual provisions

MCCY and Grace Fu are satisfied there was no fraud involved.

Sulaiman Daud | August 05, 2019, 05:29 PM

There was no fraud involved in the waivers given by the National Gallery of Singapore (NGS), the Ministry of Culture, Community and Youth said.

And this was why there was no attempt to recover S$13 million from the contractor.

The National Gallery development project is owned by MCCY, but managed by NGS, a separate company that has a funding agreement with the ministry.

It had a budget of S$532 million and the project was completed in 2015.

AGO's report

Workers' Party MP Peng Eng Huat referred to the Auditor-General's Office's (AGO) report for FY2018/2019 in his bid to find out more about public finances.

Among other things, the report concluded that it may be "too late" to recover the over-payment of S$13 million from the contractor after finding an improper waiver of contractual provision.

Png asked for the reason behind AGO's conclusion.

MCCY satisfied no fraud involved

Speaking in Parliament on Aug. 5, Minister for Culture, Community and Youth Grace Fu said her ministry had reviewed AGO's findings, and was satisfied there was no fraud involved.

Fu explained that the S$13 million primarily referred to penalties imposed for the additional time taken by the contractor to complete the construction work.

Therefore, the waiver of such penalties did not amount to an over-payment.

Fu added:

"NGS duly executed all contracts under its purview to deliver the project on time and below budget."

Fu said that MCCY's "fifth and final audit" has resumed, after being suspended by the AGO audit.

She said:

"Arising from the AGO audit and MCCY’s final audit, MCCY will work with NGS to enhance their financial processes and procurement policies."

Government will not look to recover the S$13 million

According to CNA, Png followed up in a supplementary question whether the government will attempt to recover the S$13 million.

Fu said that she had gone through AGO's report "extensively" with NGS.

Based on her understanding, there was no reason to believe that major recoveries were needed.

Fu said "(the ministry is) satisfied that the claims or the variations orders have good basis".

Top image from and National Gallery Singapore's Facebook page.