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.

Tahir 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.

Lim 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.

Funds for SEDC in PR controlled states should not be channeled via MARA

I am greatly troubled by the announcement by Noh Omar of the Entrepreneur and Cooperatives Development Ministry that the Ministry will stop disbursing development funds to the state SEDCs (Economic Development Corporations) in PR (Pakatan Rakyat) controlled states as reported in Malaysiakini but will now be given through MARA (Majlis Amanah Rakyat}.

A check of MARA's website showed the following:

Majlis Amanah Rakyat (MARA), Agensi di bawah Kementerian Pembangunan Usahawan & Koperasi Malaysia, ditubuhkan pada 1 Mac 1966 di bawah Akta Parlimen sebagai sebuah badan berkanun hasil daripada resolusi Kongres Ekonomi Bumiputera pertama pada tahun sebelumnya.

Adalah menjadi kewajipan Majlis bagi memajukan, menggalakkan, memudahkan serta menjalankan pembangunan ekonomi dan kemasyarakatan dalam persekutuan dan khususnya dalam kawasan-kawasan luar bandar.

Essentially, the above says MARA is for Bumiputera, not for Malaysians in general. However, from some quick enquiries, SEDCs are for all Malaysians, not only for Bumiputras.

So, in my opinion, the decision of Noh Omar of the Entrepreneur and Cooperatives Development Ministry that they will stop disbursing development funds to the state SEDCs but do it via MARA which is only for Bumiputeras are not appropriate and Malaysians should register a protest.

I hope the PR Member of Parliaments will bring this matter up in Parliament, if not as supplementary question, then submit it for question for next Parliamentary session.