Economy

Tender or Not

When tenders are not required, selection of contractors will be based on quotations and negotiations which will encourage abuse and corruption. To speed up spending, officers are likely to have absolute power to exercise their discretion in the selection of contractors. There will be few if any obstacles to money changing hands under the counter amongst interested parties to ensure selection.  

One unintended benefit from the new tender system is that it is likely to generate a lot more work for the MACC and keep the increased manpower being recruited very busy. But perhaps I am wrong and this group of beneficiaries of tax payer money will enjoy special exemption from the normal oversight, scrutiny, transparency and accountability.

More Public Funds Allocated to Contractors 

Related to this is the Deputy Prime Minister Najib’s announcement in the Kuala Terengganu by election, on 9th Jan. 09, that the Government has already set aside RM900 million, which is RM300 million more than for last year, for works to be undertaken by Class F contractors this year. If this sum is not enough, according to him, the Government is willing to consider additional allocations. Can all this money produce more efficient and competitive Bumiputera contractors?

Our statistics show that Malaysia had one contractor for every 614 persons in 2005. Most likely there are even more contractors by now. This ratio is likely to be amongst the highest in the world, if not the highest.

Why should we waste so much tax payer money? 

I would like to pose a few questions.  Out of hundreds of high rise buildings in Kuala Lumpur has any Bumiputera contractor won any of the building contracts through an open competitive tender process? Out of hundreds of kilometers of highway in Malaysia, has any Bumiputera contractor won any part of the highway contracts through open tender?

The answers to the above questions are likely to be in the negative.  The failure of Bumiputera contractors to win tenders solely on the basis of merit and efficiency shows that all the Government’s efforts in trying to produce reputable and competitive Bumiputera contractors since our independence in 1957 have failed.  Unless the Government changes its methods/policies which have clearly been shown to be unworkable, it will be a long time before we can see the emergence of competitive Bumiputera contractors able to stand on their own two feet against all comers.

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