Repeated delays put spotlight on firms' connection

The uncompleted Braddell Flyover extension (left) and the associated pedestrian bridges on March 3, 2017.
The uncompleted Braddell Flyover extension (left) and the associated pedestrian bridges on March 3, 2017.ST PHOTO: LIM YAOHUI

The repeated delays to the Braddell Road flyover works have tossed up the question of why Feng Ming Construction (FMC) won the second public tender to complete the project, which was left behind by Hexagroup when it ran into financial woes.

Explaining the tendering process, a spokesman for the Land Transport Authority (LTA) said it looks at contractors' "safety, financial capacity, availability of technical personnel, proof of management standards and project track records, before they are allowed to bid for public-sector construction projects".

FMC was one of three bidders that met its requirements and was awarded the tender as it submitted the most cost-effective bid at $29.9 million, the spokesman said.

Checks by The Straits Times show that FMC, which was established in 1989, has a good track record in completing multimillion- dollar construction projects for government agencies.

But company records show a link between FMC and Hexagroup, which is currently winding up. FMC director Lim Hong Beng had co-owned a company, Lim Hong Beng Construction, with Hexagroup director Lim Hong Lam in 1984. And the second Hexagroup director, Mr Lim Hong Leong, had served as director of FMC from 1997 to 2006.

When asked if they were relatives, because of their similar names, Mr Lim Hong Beng neither confirmed nor denied the relationship. He said in Mandarin: "In this industry, a lot of local companies are linked by family ties, but this should not matter as they are completely different entities."

The LTA also said that both companies were not related at the time of the tender bid. "Based on records by the Accounting and Corporate Regulatory Authority, Hexagroup and FMC were separate commercial entities with no common directors and shareholders when FMC submitted its tender bid in March 2015," said the spokesman.

Mr Robson Lee, partner at law firm Gibson Dunn, said there are no government procurement rules against re-awarding incomplete tenders to firms with family ties.

But he added that this case raises questions about whether the public tender process was fair to the other bidders.

"The spirit of the public tender process is that bidders should not have an advantage of having more information than what is in the tender," he said. "This could be information about the projected cost of the project, for example."

A version of this article appeared in the print edition of The Straits Times on March 17, 2017, with the headline 'Repeated delays put spotlight on firms' connection'. Print Edition | Subscribe