KUALA LUMPUR (Aug 27): The wide discretion granted to ministers in the Government Procurement Bill to overrule its requirements on government-linked bodies and sign off on procurements have raised concerns on the serious gaps in the proposed legislation, said Institute for Democracy and Economic Affairs.
The think-tank, in a statement, also questioned the finance minister’s ability to make decisions when the procurement board is divided and unable to reach unanimous decisions, as well as the ability to override procurement methods.
“These provisions politicise procurement and leave critical spending decisions vulnerable to abuse, since the bill legalises existing poor practice,” said Ideas senior research manager Alissa Rode.
Under the bill, which is tabled for second reading in the Dewan Rakyat on Wednesday, the finance minister or chief ministers of states can exempt “one-off allocations” to government-linked companies and statutory bodies from the bill entirely. They are also the sole approval authority for decisions valued above RM50 million.
The bill, said Ideas chief executive officer Aira Azhari, “risks legitimising the same flawed practices that led to scandals” in the past.
She cited four incidents: the littoral combat ship procurement by the Ministry of Defence which saw multiple delays and massive leakages; corruption involving the awards of water projects by the Sabah Water Department; alleged kickbacks over Malaysia’s billions-of-ringgit acquisition of Scorpene-class submarines from France; and mismanagement in the Port Klang Free Zone (PKFZ) project which resulted in the quadrupling of costs to nearly RM8 billion.
Concerns were raised on the naming of the finance minister as “the investigative power and compliance monitor for procurement”, particularly when he or she is also the supervisor of procurement policy.
“In other country models, the oversight and investigations are assigned to independent entities that do not handle procurement. This would ideally be a future ombudsman’s office, or the auditor general,” the statement read.
The think-tank also called for the law to make it compulsory for all tenders, award decisions and contract changes to be made public.
The bill must be referred to the Parliamentary Select Committee on Finance and Economy for further review, Aira added.
“The review process should also include consultations with civil society organisations (CSOs) to ensure the bill reflects best practices and public interest,” she said.
Malaysia must adopt international procurement standards “by ensuring narrow criteria for departing from competitive procurement, and independent oversight”, Rode added.
“Without serious amendments to the bill, similar failures in procurement can continue to happen,” she said.
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