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Clarification statement on Entry Point Project 6

Replicating Integrated Zone for Aquaculture Model (iZAQ) by Dr Fadhlullah Suhaimi Malek, Director, Agriculture NKEA, Performance Management and Delivery Unit (PEMANDU)

The Auditor General’s Report 2014 on the activities of the Federal Ministries/ Departments and Management of Government Companies Series 2 released on 15 June 2015 highlighted concerns on the Ministry of Agriculture’s Replicating Integrated Zone for Aquaculture (iZAQ) project, which is an Entry Point Project (EPP) under the Economic Transformation Programme’s Agriculture NKEA. 

All audit findings with regard to the iZAQ project have been reviewed and appropriate actions have been taken prior to the tabling of the audit report. Detailed feedback on the findings are available in a report from the Ministry of Finance tabled together with the AG Report 2014 Series 2. It can be accessed at https://goo.gl/QKGHAX.

We strongly encourage the media to refer to the responses which provide a comprehensive view of measures that have been taken or are being taken to remedy problem areas.

This statement also serves to clarify a few areas with regards to the iZAQ project:

Governance and transparency on NKEA Agriculture projects
  1. All NKEA Agriculture projects are evaluated and approved according to standard operating procedures.

  2. All project proposals are generally assessed on GNI contribution, number of jobs created and the amount of investment made by the private sector for the project.

  3. Any government funding to be provided based on reimbursement will be strictly assessed and verified by the technical team of respective Agencies/Departments acting as the Entry Point Project Owner (EPP Owner).

  4. For more information on how to participate in NKEA Agriculture: http://www.moa.gov.my/nkea

Reimbursement incentives model
  1. For NKEA Agriculture related projects, the reimbursement incentives model applies.

  2. The Government reimburses up to 30% of its investment for infrastructure related to the project once production targets are met. Examples of infrastructure include road and jetty construction and water supply that can be used by the public within the vicinity of the project. This helps alleviate the Government’s burden of having to provide such infrastructure prior to project commencement, which had been the norm before.

  3. This 30% funding is based on reimbursement against an approved set of infrastructure elements where the cost is benchmarked. All claims are audited, and upon approval, will see only 70% of the 30% quantum being paid to the company.

  4. The balance 30% will only be paid at a later stage when the company achieves its production target. These targets are set upfront by the company with technical assessment made by the Department of Fisheries.

  5. This model reduces possible Government exposure like unused infrastructure and expedites the delivery of infrastructure in support of large scale projects.

Clarification on Targets
  1. The initial target for iZAQ is a total production target of 100,000 Mt over total land area of 10,000 Hectres by 2020 (10Mt per Ha) by 2020. Currently, based on KPI in the agreements signed with Anchor Companies, total production from NKEA funded projects will reach 38,810 MT in year 2020, with total land size of 3712.58 Ha (10.45Mt per Ha).

  2. At this juncture, the production target appears lower because the size of projects are dependent on land. As these projects must be proposed without any land encumbrances to the Government, land tends to be smaller BUT to date, the target production per Ha has surpassed the year 2020 target per Ha indicating higher productivity on smaller land space.

  3. As these projects are susceptible to bio-hazards, even with the challenge of Early Mortality Syndrome, the production target has been maintained and achieved as per the set targets which are tracked monthly and the final result; audited, available in the Annual Report 2014.

Roles and responsibilities for EPP 6
  • The Department of Fisheries as the EPP lead is responsible in monitoring and providing technical assistance and advisory to the private companies in ensuring the projects are on time and achieves its targets. It is the private companies that carry out day to day implementation on the ground.

  • PEMANDU provides the support and helps to facilitate the implementation when project implementation hits an obstacle.


Media contact:

Anuja Ravendran
ETP Communications
Mobile: 019 - 372 1930
2015/06/18
Status:
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