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Logo of Phnom Penh Post newspaper Phnom Penh Post - SMEC sacks staffer for conflict of interest

SMEC sacks staffer for conflict of interest

An Australian firm advising the Cambodian government on a multi-million dollar road repair programme has confirmed it sacked a staff member after an investigation into alleged impropriety.

The employee sat on an evaluation committee which awarded a contract to supply road-building equipment to a company he had personal links to.

The man worked for the Snowy Mountain Engineering Corp (SMEC), a former Australian government-owned company acting as technical advisers to the Ministry of Public Works.

A SMEC team is advising a ministry Project Implementation Team overseeing the spending of $24 of million Asian Development Bank money on the reconstruction of Cambodian national highways.

The ministry team bought some $2 million worth of equipment early this year, including some from Australian company Elite Machinery.

SMEC employee John Johnson, who had previously "been involved" with Elite Machinery, was a member of the ministry panel which awarded Elite the contract. An investigation was launched after Mr Johnson's association with Elite came to light six months later.

"We saw that it was in everybody's interests that we sever our relationship (with Mr Johnson)," SMEC senior highway engineer Richard Dixon said. "It was getting to the point where it could have been nasty."

Mr Dixon was reluctant to specify Mr Johnson's links with Elite Machinery at the time, only saying that he had been associated with the company. He said Elite's management had given assurances that Mr Johnson was not a shareholder in the company and was not paid by it.

Mr Johnson "knew there was a conflict of interest", but Mr Dixon did not believe he had deliberately acted improperly.

"He knew where he could get a particular piece of equipment...he went there (to Elite)."

Elite had been the lowest bidder for the contract to supply the equipment - "of the order of several hundred thousand dollars" - and Mr Johnson had been only one member of the committee which awarded it.

Elite had since won other contracts to supply the ministry with roading materials since Mr Johnson's departure from SMEC.

The Asian Development Bank (ADB), which funded the equipment purchases from a loan to the Cambodian government, had been informed of the incident.

Mr Dixon rejected allegations made to the Post by others in the industry that other instances of firms with links to Mr Johnson tendering to supply equipment had been the subject of investigation.

Meanwhile, he said the ministry team's road reconstruction work, primarily on National Routes 1, 2 and 3, was progressing more quickly after a slow start. Mr Dixon acknowledged that the ADB "were critical of some of the things that have gone on" in regard to the slowness of the work.

He said delays had been caused by problems with obtaining new equipment and machines.

More recently, bids for the reconstruction of three sections of Route 5 are understood to have been delayed because of inadequate tender documents prepared by SMEC.

The original December 16 deadline for tender bids to be made was extended until January 5.

Extensive additions to the original tender documents have been issued after the ADB, which is funding the work, complained they were substandard.

A facsimile to SMEC from the ADB's Manila headquarters, obtained by the Post, identified 33 "inconsistencies" in the documents and said the list was "not exhaustive".

The facsimile, dated November 8, concluded that the documents were "inexpertly" compiled and "not of an acceptable standard". It said they should be "thoroughly reviewed" and revised urgently.

Mr Dixon said there had been problems with the documents because they had been produced under severe time constraints. Two sets of "new instructions" to prospective tenderers had since been issued to improve them.

ADB programs manager in Manila, R M Tan, said the bank would need to investigate the matter further and was not in a position now to comment.

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