Macau, China, 25 May – An audit report released Tuesday found that the government’s Transportation Infrastructure Office (GIT) spent 260 million patacas on the core service and construction contracts for the Macau light rail project, which were not included in the publicly announced 7.5 billion patacas (US$ 930 million) budget, which itself already has overrun.
The report, drawn up by the government’s Audit Commission (CA), said that the GIT’s cost overrun was due to the lack of a full budget assessment for the Light Rapid Transit (LRT) project.
According to the report, the project’s budget was initially set at 4.2 billion patacas (US$520 million) in 2007, but just two years later, GIT raised the budget to 7.5 billion patacas meaning an increase of almost 80 per-cent.
The report also found that not only did the budget increase, but it has already overrun by 16 percent, from 7.5 billion patacas to 8.688 billion patacas (US$ 1.086 billion).
Last December, the GIT granted a contract to provide the rolling stock and services required for the first phase of the LRT project to Mitsubishi Heavy Industries (MHI) for 4.7 billion patacas, which is part of the current budget of 8.688 billion patacas. The LRT is supposed to be operational in 2015.
Moreover, the GIT spent an additional 260 million patacas between 2008 to June 2010 granting 31 side projects for the LRT system that include management and technical support services, environmental evaluation, research and an LRT system exhibition hall design.
The 260 million patacas were not included in the de facto 8.688 billion patacas budget.
According to The Macau Post Daily the report also points out that the GIT directly granted 27 of the 31 side projects to just one supplier – without any public tender. The report said that this had deprived the government of "getting a better project within a shorter completion period at a lower cost".
On top of that, the operational costs of the GIT, which was purposely set up in 2007 to oversee the LRT project, amounted to over 30 million patacas, which was not included in the 8.688 billion patacas budget either.
The Audit Commission also found later that during the past two and a half years of operation, the GIT had applied and received from the Treasury a total of 1.179 billion patacas for its urban transport system construction and equipment projects, but had only used 2.05 million patacas – or 0.17 percent of the total amount.
‘This is a huge amount of public money left idle for almost three years. This shows that the GIT was unable to plan a rational annual budget,’ the report pointed out.(MacauNews/Politics)