Report: National Service contractor sues govt for RM14m after programme terminated in 2018

KUALA LUMPUR, April 15 — A company which has been wound up and dissolved has filed a lawsuit against the Malaysian government to seek payment of RM14.8 million in compensation and alleged payments it would have received, due to the government’s termination of contracts for the National Service (NS) programme.

According to news portal The Vibes, Sri Ledang Ventures Sdn Bhd was contracted in September 2005 by the Defence Ministry to supply food and services at the NS camp Kem PLKN Sri Ledang for four years with a RM14.5 million contract value, with the contract extended from 2009 to 2013 at RM4.7 million annually.

Citing court documents, The Vibes said the government offered to extend the contract from 2014 to 2016 with the condition that it had to upgrade the NS camp, with the construction costs for the upgrade amounting to RM3.1 million and the company in September 2014 received a RM3 million loan from SME Bank.

The federal government in 2015 told the company about plans for the NS programme’s temporary suspension, but gave it a RM700,000 contract from March to December 2015.

After a one-year suspension, the NS programme was brought back in 2016, with the government in January 2016 extending the company’s contract by four years from 2016 onwards.

After a change in government in 2018, the government announced the NS programme would be terminated and in a September 3, 2018 letter told the company of the termination of its contract.

According to The Vibes, the company claimed then prime minister Tun Dr Mahathir Mohamad had in a March 2019 meeting — with a few NS camp operators over the contract termination — allegedly agreed to restart the NS programme at a smaller scale as a temporary solution.

The RM14.8 million which the company is seeking to claim from the Malaysian government is namely RM3.1 million for the Kem PLKN Sri Ledang’s upgrade costs, RM2.2 million for rental services from 2014 to 2015, RM5.2 million for rental services from October 2018 to December 2020, RM702,282 for failure to make payments for additional services from 2017 to 2018, failure to fully pay for the supply of food to NS trainees from 2014 to 2018 (RM1.2 million) and from 2018 to 2020 (RM2.4 million), the portal reported.

The Inland Revenue Board had in March 2021 wound up the company, and the now-dissolved company obtained the Insolvency Department’s nod for the lawsuit which was filed on March 15 this year at the High Court in Kuala Lumpur.