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Wednesday, November 30, 2011

Bumiputera contractors praised Penang for ending crony capitalism and patronage politics

Bumi contractors hail Penang for ending patronage politics

12:38PM Nov 30, 2011

Winning a government contract during BN rule in Penang used to be all about ‘know-who’, according to Class F Contractors Association of Penang president Tahir Jalaluddin Hussain.

"(It) had nothing to do with how efficient or competitive you are," he was quoted as saying in a focus paper released by non-profit group Research for Social Advancement (Refsa), which cited various sources.

azlanTahir reportedly said the open tender system has encouraged greater productivity among bumiputera contractors where previously, “the road to a government contract was through the local Umno division head".

"There was no other way. And you had better be prepared to pay a commission... they don't help you for free," he said.

“The biggest difference is that genuine Malay contractors are now getting contracts based on nothing but their own capabilities.”

In its analysis, Refsa considered this to be the most important achievement of the open tender system being implemented in Penang.

It also said rehabilitation of the image of Class F contractors is another positive outcome.

"Those who flourish in Penang do so, not as cronies but on ... merit. Professional pride is replacing the once negative image associated with Class F contractors," the paper said.

"More importantly, it has eliminated rent-seeking and patronage politics."

The paper noted that Malay contractors have won more than 70 percent of tenders awarded by the state government.

In the three years that the system has been implemented, the Malay contractors’ ‘win’ rate has exceeded 90 percent at several state government agencies.

Criticism of policy

Umno leaders had criticised the policy change as an attempt to curtail Malay entrepreneurship and an affront to bumiputera rights, said Refsa.

However, MCA had charged that Chinese interests have been threatened since the DAP came to power.

NONELim had produced figures from 2008-2010 to show that 18 projects valued at RM41 million had been awarded to bumiputera contractors.

They also won 98 percent of state contracts through the Public Works Department from January 2008 to November 2010, valued at RM20.4 million.

Refsa, however, said it is "all in the numbers", since the federal government stipulates that only contractors licensed by the Finance Ministry may bid for contracts - and 94 percent of licensed contractors are bumiputeras anyway.

Furthermore, Class F licences for jobs below RM200,000 are exclusively for bumiputeras, the report noted.

"It follows then that most contracts in Penang are won by bumiputeras. The (Penang) government is not being discriminatory. It is complying with federal government policies," the report added.

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