Worrying business-as-usual trends in tenders, contract awards

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Graphic: csj-ng.org

C4 is gravely concerned over recent news reports on how the trends in tenders and contract awards have transpired.

Support letter from the agriculture and agro-based industry minister to the prime minister

On 27 November, the ministry said the National Farmers Association’s (Nafas’) operations had to be suspended from June 2018 to January 2019 for a special audit.

It was found that its board of directors had carried out 42 incidents of malpractice.

The Minister, Salahuddin Ayub, wrote to Prime Minister Dr Mahathir Mohamad recommending a RM1.4bn tender be given to the Nafas, claiming he didn’t know about the tendering exercise carried out by the secretary-general of the ministry.

He perceived the action of writing a support letter as harmless, as the award letters had not yet been issued.

Economic Affairs Minister Azmin Ali’s secretive dinner at his residence

This was held upon Pakatan Harapan’s massive defeat at the Tanjung Piai’s by-election on 18 November 2019 at his residence

A group of UMNO and PKR MPs attended to ensure that Mahathir still has good support from PH and the opposition, and MPs wanted to discuss the allocations for their constituencies.

Contradictions … yet again

On 22 November 2019 Prime Minister Dr Mahathir Mohammed said that ministers are allowed to mete out contracts within their purview. 

It bears reminding that just in late August 2018 Mahathir said that “Ministers and deputy ministers can no longer issue letters of support for projects or any other applications”. 

This was further etched in the National Anti-Corruption Plan (NACP) 2019-2013 launched by Mahathir himself on 29 January 2019: “prohibits Members of the Administration or any highly influential persons from issuing supporting letters for any projects or applications as such, heads of departments to deny such letters as directives or decisions”.

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And so what was Minister Salahuddin thinking when he wrote the support letters? And to Nafas, which was being scrutinised and audited for not just one but more than 40 cases of malpractice.

We remind Minister Salahuddin why it is wrong to issue support letters:

  • unfair practice to secure contracts of procurement, that the current government had previously vehemently opposed during the previous administration
  • deviation from PH’s promise to not fall back on the old practices of direct tender by giving out contracts, as these directly enable corrupt practices to occur
  • encourages the practice of favouritism within the government procurement system

Open tender, a requisite

PH has agreed to move towards the implementation of an open tender system in public procurement as stated in NACP 2019-2023. It was argued then that writing support letters to secure a contract:

  • is not just erroneous but also deplorable as a clear indication of the unchecked power of public officials in using power to influence the selection process
  • resembles the negotiated tender practice whereas the open tender practice, which promotes a fairer and more competitive process, is preferred
  • negates the open tender practice, which seeks to ensure that checks and balances are in place to avoid unscrupulous activities in the selection process and
  • under the foreseen threat of public procurement in the NACP (2019-2023), in the case where it is not followed, undermines the transparency of the procurement process

Thus, by opting for a fairer and more competitive-based procurement strategy, the government should set a more competitive mechanism to prevent any misuse of power that might reduce the credibility of the government.

READ MORE:  Audit all projects awarded via direct negotiations - C4

Recommendations

C4 Center urges the Minister, Salahuddin Ayub, to explain why Nafas was backed by a support letter when the company had already been put on a special audit suspension since last year. Ministers or any public officials’ role is not to interfere with any part of the tender selection process as it would revert to the direct tender practices of the previous administration.

C4 Center urges Prime Minister Mahathir to explain, how is it all right for ministers to give out contracts, when the transparency promise was the driving force of the PH manifesto?

C4 Center also seeks information on the progress of the promised public procurement law, announced by Finance Minister Lim Guan Eng in his budget speech in 2018.

We urge PH to go back to the essentials of their promises and strive to make Malaysia a better place.

Cynthia Gabriel is executive director of C4 Center.

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Gursharan Singh
Gursharan Singh
8 Dec 2019 10.57am

Is this not a common worldwide culture where politicians main objective for having power maybe more for personal greed for power and high remuneration packages/perks and opportunities for enrichment of self and those related/connected to them.
The benefits of those given positions may continue even when retired?
Also are possibilities of being convicted rare if and when charged and any meaningful penalties like jail terms and high financial penalties being imposed be remote as the legal systems may be used to repeatedly postponed and then the several levels of appeals all of which may take years if not decades by which time some of those involved may have retired/replaced/died?

REGULAR FINDINGS OF MANY COUNTRIES AUDITORS GENERAL