This article first appeared in Forum, The Edge Malaysia Weekly on September 16, 2024 - September 22, 2024

Last week, the Malaysia Competition Commission (MyCC) imposed fines amounting to RM446,092 on seven privately held companies for rigging defence-related contracts worth RM20 million.

The fine is a measly sum compared to the quantum of the contracts awarded between 2017 and 2020. It is less than 3% of the total contract sum and can be easily covered by the profits made from such jobs, which normally have margins of 30% or more.

The Defence Ministry-related contracts of RM20 million are only the tip of the iceberg. To get an idea of the scale of government contracts being rigged, one only needs to look at the scope of MyCC’s current investigations.

MyCC is investigating 13 bid-rigging cartels involving 561 privately owned companies that have won jobs worth RM2.37 billion. Another 463 private companies that have won government jobs worth RM9.27 billion are being assessed following complaints.

The total amount is more than RM11 billion.

There are many rigged government contracts involving many ministries. This happens all the time, especially with contracts worth less than RM50 million that are often awarded via restricted tenders.

Under a restricted tender, the criterion is that each tender must draw several bids, which usually involve up to eight companies. Every bidder must be registered as a vendor with the government.

As long as several companies have put in their bids for a particular project, the tender can be carried out and awarded to the best bid. The entire process can be done at ministry level and does not need the approval of the Ministry of Finance.

Because the amount is small and the tender is normally restricted to companies with substantial bumiputera equity, the big boys do not participate in such exercises.

Nevertheless, leakage from the government coffers is huge. Yet, no one, whether from the government or the opposition, has championed the cause of curtailing cartels that are rigging government contracts worth billions.

Instead, there is an intense debate on matters such as halal certification for restaurants that are not selling pork or alcohol.

The likes of Umno Youth leader Datuk Dr Muhamad Akmal Saleh champion anything related to race and religion. Previously, it was the KK Mart socks controversy. Now, it is the halal certification of restaurants that do not serve pork or alcohol.

Akmal is quick to jump the gun as he fights for Umno to be relevant to the current unity government, in which the party has fewer seats than the others.

DAP, which is the backbone of Pakatan Harapan, is more interested in outdoing MCA in championing matters that concern businesses and vernacular schools. As for PAS, its focus has been mainly on Islam and creating more awareness among non-Muslims to counter Islamophobia.

Prime Minister Datuk Seri Anwar Ibrahim regularly talks about the eradication of corruption and cutting leakages in government spending. But he has not been able to galvanise the entire Cabinet and the civil service to continuously send out this message.

None of the political parties is actively taking up the issue of leakages in government spending and MyCC’s investigations into RM11 billion worth of contracts.

The rabble rousers among politicians hardly speak about the cartels rigging government contracts. Instead, the slightest of problems related to race and religion are blown up beyond proportion.

Why is that the case?

Could it be because the issue of 1,000-odd private companies that rig contracts of more than RM11 billion generates very little political mileage and is not as sensational as the halal certification issue?

So far, the work done by MyCC has been encouraging. But the penalties imposed are feeble in comparison to the profits earned by the companies that have rigged government contracts.

The biggest fine imposed by MyCC so far has been on five chicken feed millers in December last year. A total fine of RM415.5 million on the five companies was for colluding with a view to fix the price of chicken feed, a move that eventually affected market prices for consumers.

The companies are appealing against the fine.

To curb the might of cartels, MyCC needs to have more firepower to investigate companies that bid for government jobs. For instance, instead of only meting out fines, MyCC, together with the Attorney General’s Chambers (AGC), should also be allowed to hand out heavier sentences such as jail time and the freezing of accounts until the investigations are over.

MyCC should also be armed with the powers to investigate the beneficial ownership of the companies, the wealth of its owners and source of funds of the private companies bidding for government jobs.

That would send a chill down the spine of the ringleaders of the cartels rigging government contracts. By merely imposing fines, MyCC lacks bite.

The leakage from government contracts runs into billions, which is something politicians should be looking at instead of the halal certification issue, which should be determined based on its commercial value and not merely serve as a warning to Muslims.

Former International Trade and Industry Minister Tan Sri Rafidah Aziz correctly pointed out that politicians should not be wasting their time debating the need for restaurants not serving pork and alcohol to be halal-certified. She said Muslims who were not sure of a restaurant should not patronise it.

A bigger issue at hand, she said, was non-halal money obtained from corruption and abuse of power.

In the next few weeks, the halal certification issue will probably wear off because the ultimate decision-maker is the Rulers Council.

Corruption and leakages in government spending are far more serious issues that warrant the attention of politicians across the board. But will these issues be given due scrutiny?

M Shanmugam is a contributing editor at The Edge 

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