(Note : This letter has been edited to protect third parties)
Date: Wed, 3 Oct 2007 11:32:08 +0800
Following our telephone conversation the day before yesterday with regard to Kele issue and the various unclear reports that you might have gotten from your team I would like to clarify the followings:
1. After the reactivation of our Oceana banks’ facilities in late April 07, the client has encouraged PECD to open more works’ fronts in attempt to recover the delays (due to stoppage of work for almost 3 months). At the time, the existing work force was not enough to cover the required progress and PECD was encouraged to out source the additional work force from the local market (this was adequately recorded in the weekly site progress meetings). Kele was recommended by the client’s Project Manager (PMDC) and we requested them to quote after we have done our due diligence. There were series of negotiations sessions with Kele to conclude the pricing and proposed contract that TT was well aware of (through my briefs during his frequent visits to Dubai). However, Attachment (1) is an email from me to TT in this regard.
2. A full set of documents (Original hard copy of the spread sheet, draft contract and LC) have been passed to him to bring back to KL in order to get your approval and necessary endorsement of the LC. This can be witnessed by all involved staff (contract, PD, QS and accounts).
3. TT, ask me to proceed (due to the urgency to make a decision to satisfy the client’s persistence) while he requested A /KL Commercial to perform further analysis and to prepare a different presentation from the one given to him for your approval and further actions (obtaining the necessary LC approval).
4. Kele Contracting demanded the LC issuance prior to their commencement of works on site or otherwise we should issue security cheques that would be surrendered back to us upon issuance of the LC (as stated in the draft contract/the above attachment 1). You may note the following:
a. TT or his team has not responded to my email in Attachment (1). If that email or its contents (attachment 1) was an alien action why has he not alerted me, the PD or the Contract manager?
b. TT has not objected nor commented on the attached draft contract (part of attachment 1). Under the terms of payment (of the draft contract), Item 7 clearly mentions: “PEREMBA will provide a security cheque for the estimated value of two month’s invoicing as security in the amount of AED 2m until the LC is issued. Once the LC is issued, the security cheque will be returned to PEREMBA” . If this was against some policy why there was no emphasis from TT or his team on the above said draft contract!
a. Why should I or Zainal jeopardize ourselves and career should we know that the LC is not going to be issued?
b. If the LC was issued all these problems could be prevented even if there was dispute on tjhe payment amount simply because of the LC requires further certification documents prior to payment.
5. Kele started the works on site and, somehow, the client was happy that we have started showing improvement on the progress score. This has given us the room to resume the negotiation on the outstanding Commercial issues such as the new revised contract rates, builders’ works fees, MEP attendance fees etc. Please refer to Attachment (2) which is an email from the client in this regard. This was briefed to TT and hard copy of the email was given to him during his visits to Dubai. In fact TT has attended many follow up meetings with the client as he aimed to expedite conclusions and then enhance the overall projects operation cash flow.
One Million Dollar question: why there was no objection from TT or the Management when Kele Contracting started the works on site if (as he claims) there was no approval??? Was there any written warning or show cause to me or to the Contract Manager and the PD on this alleged violation?? He visited the sites, attended staff and clients’ meetings and such thing could not be overlooked!
6. Soon after, Kele Contracting started chasing for their LC and demanding their first progress claims. PECD Dubai was informed that the approved LC document was at the finance department in KL. Attachment (3) is self explanatory and easily demonstrates that even PECD Malaysia was well aware of the above.
7. After the departure of SM and when NS took over, TT has agreed with NS to reduce the number of workers on site (despite this was against the client will) by cancelling Kele’s night shift as a first step. This unilateral decision has raised some tension with Kele as they were not prepared to relocate their workers to another project. In addition and at that time, we were yet to pay them their invoice or had issued the LC. Kele has reacted on the above by a minor labour strike/protest on site and the client has noticed that. The following emails are self explanatory:
a. Attachment (4) email from client to me and TT questioning the cancellation of the night shift.
b. Attachment (5) email from client to me and TT questioning Kele’s labour strike.
c. Attachment (6) forward the above email from me to TT asking about the status of the LC.
d. Attachment (7) reply on the above email from TT to me in which he has wrongly referred to his previous emails (see Attachments (7a) and (7b) respectively) regarding the Turkish Subcontract agreement AND NOT KELE. His reference emails were originated to verify the Turkish subcontract status which was not finalized at that time. You may also note in the above email that TT has mentioned about his agreement with NS to reduce the labour force without a proper plan from the PD. In addition he was confused in his reply between Kele and the Turkish subcontracts on the measurement element.
e. Attachment (8) reply on the above email from me to TT explaining to him that there was no agreed plan (to my knowledge) from the PD to reduce the labour also I instructed NS to put forward his proposal.
f. Attachment (9) reply on the above email from NS to me and TT which has confirmed that there was a totally different plan from what I have agreed with the client and that NS was given the mandate from TT to do so. It was very clear from the email that the reduction of the manpower and other site logistics was done prior to obtaining any agreement from the client or myself.
g. Attachment (10) reply on the above email from DD warning for the possible encashment of the security cheques.
8. The client has remained unsatisfied with the reduction of the labour force despite the personal assurance given by NS to the client on achieving the same progress with reduced labour force. See Attachments (11) and (12) respectively.
9. As I was asked to start handing over my responsibilities on 25th June 2007 (due to the expiry of my previous contract with PECD Dubai LLC) I was unable to contribute in resolving the above situation or any associated consequence.
10. In addition to the above there was a comprehensive handover process carried out (recorded through minutes of meeting, handout notes and auditors participation) in which the above issue was addressed. See Attachments (13) and (14).
As such, how can a person be in denial for the above process when it has involved enormous amount of correspondence and meetings/discussions with both staff and client. The above attachments are just part of the daily communications. All staff and client representatives were aware of every single decision we made at the time and they can witness if necessary.
I hope the above clarifies my and Zainal’s stand and enlightens any ambiguity. Please don’t hesitate to write to me should you need further clarification/information.