Procedures followed, says Tourism Ministry

The Tourism Ministry has denied allegations it did not follow the Finance Ministry's procedures in the procurement of its advertising projects which led the ministry to overspent to a tune of RM270 million.

Its secretary-general, Datuk Dr Ong Hong Peng (pic), said in a statement yesterday the ministry was taking the Auditor-General's Report seriously and had taken steps to improve its money management method.

"All payments are based on completed works and attached with the bills and other supporting documents as per the Finance Ministry's requirement," he said.

Dr Ong explained there were two methods of procurement for advertising practised by the Tourism Promotion Board (TPB) — open tenders and direct bookings.

"Procurement through direct booking has saved the ministry its agency's commission cost (15 per cent of media buying) of RM19.93 million in 2009 and RM9.20 million in 2010, as opposed to using the services of advertising agencies selected through open tenders," he said.

"This method has also helped TPB to plan the expenditure for 2009 and 2010 with better money management and reduced its outstanding deficit."

He said effectiveness of this strategy was reflected in Malaysia's ability to lure 23.6 million tourists with a tourism income of RM53.5 billion in 2009 and 24.6 million tourists with an income of RM56.5 billion last year.

"For the record, TPB has implemented the direct booking method since 1998 as per its Management Circular 1998 and the buying is only done with media companies such as CNN, Discovery Channel, National Geographic, BBC World, Star Channel, Al Jazeera and others," he said.

"Direct bookings are also used in the buying of space in the print media, billboards and online media as the rates offered are much cheaper than using the advertising agencies.

"However, as stated in the 2010 Auditor-General’s Report, TPB obtained approval from the Finance Ministry on Feb 16 this year to further strengthen the procedures in the direct bookings method for media buy purposes.
TPB has adhered to this new procedure."

Referring to the AG's Report regarding the placements of billboards, Dr Ong said: "The selection for the placement of billboards in Medan, Indonesia, was based on the decision made by TPB officials after carrying out the due diligence process, including visiting the proposed site.

"As a result, all stakeholders have agreed that the location is suitable. As a matter of fact, Singapore Tourism Board also chose to place their billboards there as well."

On the toppled billboard at KM50.4 of the North-South Expressway, he said it was believed to have been caused by heavy rain or strong winds that occurred the night before the audit team visited the area.

"Our periodic monitoring showed the billboard was in a good condition prior to that. Out of the 67 billboards around the country, only one toppled, making it a mere 1.49 per cent out of the total percentage," he said.

He said the agency responsible repaired the billboard at its own cost and TPB did not pay rentals during the period the billboard was grounded.

On the malfunctioned billboard at Baru 3, Shah Alam, Dr Ong said it was because the generator was stolen.

"The billboard has been repaired. As for the billboard near Mid Valley Megamall, it is there to grab the attention of road users in the day, and the contract signed does not include lighting fees," he said.

He said the ministry set up an inquiry committee on Oct 5 to investigate the AG's Report on the purchase of 1,000 metal pamphlet racks promoting Visit Malaysia Year 2007 for RM1.95 million through direct negotiation without prior approval from the Finance Ministry.

"Investigation is being conducted and the findings will be revealed to me on Nov 18. For the record, the purchase of the racks received approval from the Finance Ministry. The approval was RM1.7 million for 873 racks," he said.

On the buying of souvenirs, he said that under the Treasury's Circular (SPP 12/2007), souvenirs under RM50,000 were allowed to be bought through direct buying from suppliers.

"However, even though the souvenirs supplied have fulfilled the specifications and quality that were determined, the market research report was not prepared.

"On this, I have issued a letter on July 6 that this is not repeated."

Source - mmail.com.my