The long-suffering investors of The Airport Mall may at last be seeing some light at the end of a very long, dark and difficult tunnel. But it comes at a huge cost to someone.

The estimated cost of completing the original project, when it first started, was B$12,000,000. However, the development was stalled at birth. Morsima Sdn Bhd, the original developer and still the owner of The Airport Mall, claimed that progress payments from the bank, TAIB, were frequently delayed, and that this caused huge problems for the company and the project.

Eventually, in 2005, Morsima Sdn Bhd reluctantly agreed to hand over responsibility for finishing The Airport Mall project to TAIB. This was at TAIB’s suggestion, and on the understanding that TAIB would complete the project without delay.

TAIB appointed HAHD Engineering and Associates to oversee the project. HAHD stated in December 2005: “With reference to our prepared Work Programme, the target date of completion is by the end of April 2006.”

The estimated cost of completion at that time was $4,000,000.

But this deadline was not reached. In fact, very little work seemed to be done at The Airport Mall, causing even more worry, frustration and anger among investors.

Nearly three more years passed before TAIB appointed a contractor and signed a widely publicised agreement in September 2008 with United Engineering, a highly respected company with considerable expertise in their field. TAIB never explained why it took them nearly three years to appoint a contractor to finish The Airport Mall.

Could all parties involved in The Airport Mall now have a collective sigh of relief?

Not quite. In those three years, the cost of raw materials and other services had risen and the estimated cost of completion is now nearly $9,000,000 – more than double that it would have cost three years earlier!

In fact, the contract awarded for the completion of The Airport Mall was a sum of $8,836,330.90. Even though this was more than double the four million dollars that was estimated in 2005, apparently it was still not enough!

The cost of finishing the project has now ballooned to a whopping $12,703,247.54, more than the cost of the whole project back in 2002 when it first began.

This represents a huge increase in costs. About 50 per cent more than the awarded contract amount. And this on a building that was nearly completed anyway!

The time it takes for the “finishing” portion of the project is another matter of concern. The project should have taken 10 months to complete, with June 14, 2009 set as the planned completion date. However, it is now running five months late! For a three-year contract to be five months late is bad enough; for a comparatively short, 10-month contract to run over by five months indicates that there is a major problem somewhere in the system. Where could it be?

I asked the two parties involved, TAIB and UE, “Why has The Airport Mall cost so much to complete, and why has it taken so long to complete it?”

A spokesperson of TAIB’s Corporate Finance Division declined to comment about the reasons for the huge increase in the cost of completing The Airport Mall. When asked why the project had taken so much longer to complete than expected, she again refused to comment.

The CEO of United Engineering, Mr John Lee, when asked what caused this huge budget blowout and the long delay in completing the project, said he could make no comment on these matters as he was bound by terms of confidentiality to his client. He added that his company, as the main contractor, was not responsible for “these aspects of project”.

The Managing Director of Morsima Sdn Bhd, Mr Wong Yep Meng, who is still the owner of The Airport Mall, was both stunned and alarmed when informed of the huge cost increase in his project.

He said that TAIB never informed him of these massive cost increases. In addition, TAIB had never informed him about any other problems that they were having in trying to complete The Airport Mall on time or on budget.

He cannot understand how TAIB can justify spending the nearly 13 million dollars that they claimed to have spent on the project. He says that The Airport Mall was about 80 per cent finished when TAIB took over responsibility for completion in 2005. He cannot understand why it was not completed for four million dollars back in 2006, as he had expected.

So far, almost everyone seems to be a loser on this project. But there is no bigger loser than the Brunei business scene.

The Airport Mall, with over 170 shops, a supermarket, and bowling centre, is expected to create about 700 jobs. To put this into perspective, the 400-million-dollar methanol plant in Sungai Liang will create about 130 jobs (according to the BEDB website). The Airport Mall represents a huge lost opportunity for Brunei.

Even with the best willpower in the world, the government can no longer be expected to find jobs in the civil service for everyone. It is up to the private sector to do all it can to create jobs for the nation’s most important resource, which is no longer oil, but all those young Bruneians who need jobs upon which to build their lives and their future. But then, the private sector cannot do it without the cooperation of the banks.

Let’s just hope that when The Airport Mall finally opens its doors for business, it will live up to the hopes and dreams of Mr Wong Yep Meng, the man who created it, as well as all those who have waited so long for their investment to bear fruit.

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