ST Electronics and ST Marine come under the ST Engineering group of companies.

MHA awards tender to oversee construction of Police Coast Guard boats to ST Electronics, the sister company to ST Marine that is building the boats

The Ministry of Home Affairs (MHA) has just awarded a tender to local electronics firm ST Engineering (Training & Simulation Systems) Pte Ltd to supervise and manage the construction of boats for the Police Coast Guard (PCG) over the period of up to 50 months, or just over 4 years.

The contract of S$1.46 million was awarded to ST Electronics for providing marine engineering services in overseeing the construction and outfitting of these boats locally and overseas, in either China, Taiwan or Latvia.

Screenshot of GeBiz document showing award of MHA tender to ST Electronics.

According to the contract, the boats would be built in phases overseas and once completed, would be shipped to Singapore for the installation of specialised equipment. After that, the boats will undergo tests and trials until the commission for the boats. ST Electronics would be responsible in overseeing and managing all the phases from construction abroad and testing locally.

Screenshot of GeBiz document showing G-Master’s (left) & ST Electronic’s bids on the MHA tender.

According to the government’s procurement website GeBiz, two companies bid on the tender – ST Electronics, the electronics arm of ST Engineering of which the majority shareholder is Temasek Holdings; and G-Master Marine Services Pte Ltd which provides management consultancy services in the marine sector. ST Electronics offered a lower bid at S$1.46 million to G-Master’s S$3 million. Ultimately, ST Engineering won the bid.

Now, while the award of the contract to ST Electronics seems fine, if you recall our series of articles from February/March this year, this particular shipbuilding project for the police coast guard was awarded to a company called ST Marine, which is another company under the ST Engineering group.

The newest contract requires ST Electronics to oversee the construction and outfitting of these new boats for the PCG, to ensure that the construction, outfitting, and testing of the boats by ST Marine proceeds as planned.

Common sense dictates that awarding a separate contract for the overseeing and management of a construction project is a way to ensure quality and efficiency of said construction.

However, when the role of overseer is awarded to a company under the same umbrella as the company that is doing the construction, one has to question the neutrality of the supervisor should any mistake or flaw crop up in the process which would indubitably damage the reputation of its sister company.

TOC has written to MHA for comments on this apparent conflict of interest.

Screenshot of GeBiz document showing tender posted by MHA in September 2018.

Another point of curiosity is the date the tender was awarded. The tender was first posted by MHA on GeBiz in September 2018 for the duration of 180 days or about 6 months. The contract start date was supposed to be March 2019. However, the tender was only awarded to ST Electronics in May 2019. Presumably, they project won’t start immediately after the tender is awarded. So this means the schedule for the project has been push backed by at least 2 months.