29 MARCH 2024
PRESS STATEMENT
On 25 March 2024, the Chairperson of the Public Accounts Committee (PAC), Mas Ermieyati, reported that Pharmaniaga Logistics Sdn Bhd (PLSB) had agreed on a repayment of RM16.78 million to the Ministry of Health (MOH). This was in relation to the disastrous procurement of ventilators by PLSB in which they were paid RM30 million to conduct — the botched operation ultimately resulted in RM13.07 million in losses and the under-delivery of the intended amount of ventilators, from a contracted 500 units to only 32 usable units. The Center to Combat Corruption and Cronyism (C4 Center) covered this issue when it first arose, demanding accountability and reforms to the procurement process. It is relieving to see that some action is being taken on this matter, but more must be done.
The procurement process as implemented by the government during emergencies lacks sufficient oversight and procedural mechanisms. This present case exemplifies this state of affairs – the procurement of ventilators was organised almost entirely through Whatsapp; it lacked a formalised contract stipulating the exact role and duties of PLSB; and was decided entirely through a Cabinet meeting that took place on 25 March 2020, with the RM30 million disbursed to PLSB on the very same day. It is also vital to remember that at the onset of the COVID-19 pandemic, then-Prime Minister Muhyiddin Yassin invoked the power under the Emergency Ordinance to shut down Parliament and also empower the Executive branch to unilaterally control government spending during emergencies.
These weaknesses have not been addressed by any government since the pandemic. In anticipation of more frequent crises due to the climate emergency and global political instability, there is an urgent need to reform emergency procurement procedures to avoid repeated wastage of public funds and to address its vulnerability to corruption and abuse. It is pivotal to realise that any mismanagement or abuse of emergency procurement by the government has a direct impact on the safety and wellbeing of the people it is supposed to benefit in precarious times.
Our key recommendations include outlining the limits of “emergency procurements” in the proposed Government Procurement Act whilst also introducing controls through some form of Parliamentary oversight into related expenditure. This may take place through a bi-partisan Parliamentary committee empowered to approve emergency procurements in the absence of full Parliamentary sittings.
As for the recommendations by the PAC to the MOH to reclaim the losses sustained from PLSB’s failures — if the PAC is of the opinion that the amount requested is adequate to recover the losses sustained by PLSB’s failures, C4 Center has no objection to this. The same is true for the PAC’s additional recommendation that the refunded amount be used to supplement the Ministry of Finance’s budget to ensure the availability of ventilator equipment in all government hospitals.
However, the recommendations made by the PAC are not exhaustive and do not provide long-term solutions to a problem that may arise again — there is no mention of the maladministration of the executive which circumvented all standard procurement practices in procuring the ventilators during the pandemic. Again, a contract was not even written up. The PAC is empowered to summon Ministers who were present at the Cabinet meeting where the procurement was decided. In the interests of transparency and accountability, the PAC should have comprehensively investigated the maladministration and provided concrete solutions to the matter. Instead, only one minister was summoned for the investigatory proceedings, with no satisfactory explanation regarding the culpability of Cabinet members for this issue arising from them.
By the PAC’s own admission, PLSB lacked experience as well as expertise to carry out medical procurements. If so, why were they even selected? This selection is especially questionable as the selection was made by Ministers who likely did not themselves possess the requisite knowledge to decide on procurements, an exercise usually carried out by experienced procurement officers and evaluation boards. This leads to a larger question of whether Pharmaniaga should even have a monopoly over medical procurements considering their abysmal performance as well as financial troubles. The failure by the PAC to raise these issues does not offer confidence in their ability to provide oversight into government spending where Ministers have had a direct role to play.
It is disappointing that the response to this issue has boiled down to rhetoric of numbers, where the losses sustained are simply supplemented with repayments later on. However, it would be an abject failure to forget that these procurements were integral to the preservation of lives during a global health crisis — it is not enough that these problems are simply glossed over at a later time, when medical supplies did not reach people who needed them most. We will never know what the human cost of this failure was, but it is imperative that such a disaster never repeats.
END OF STATEMENT
Issued by:
Center to Combat Corruption & Cronyism (C4 Center)
For further enquiries, please contact:
c4center@gmail.com
019-216 6218
Website: https://c4center.org
