Press Statement: C4 Center calls for MACC to continue VEP contract investigation

Press Statement dated 13 November 2020

The Center to Combat Corruption and Cronyism (C4 Center) views the findings of the Public Accounts Committee (PAC) regarding the vehicle entry permit (VEP) contract award with much concern. It has confirmed our fears yet again that direct negotiations in the public procurement process more often than not ends up with dirty deals and unwelcome influence by politics and power. 

The MACC has after all identified public procurement as the largest and most complex area of corruption and abuse of power, totaling 42.8% of the complaints it had received over the last few years.

The investigation by the PAC into the VEP contract award saw the conclusion that there was indeed political influence in the awarding of the RM145 mil contract to TCSens Sdn Bhd, in that Tanjung Piai MP Wee Jeck Seng is a 25% shareholder in the company. Notable as well is that Wee was an elected central committee member in MCA, while then-Transport Minister Liow Tiong Lai was the president of MCA. And it becomes laughable that denials and feigned ignorance quickly followed suit.

This is also not the first time that the Ministry of Transport has been flagged. An expose in August by Finance Minister Tengku Zafrul Abdul Aziz saw that the Klang Valley Double Track Phase 2 project was offered by the BN coalition via direct negotiations for RM5.26 bil.

Another example is the alleged criminal breach of trust over the Port Klang Free Zone (PKFZ) project, which saw the PAC naming former Transport Minister Chan Kong Choy and former Port Klang Authority general manager O.C. Phang, where the duo were issuing letters of support and letters of undertaking for PKFZ without the approval of the Ministry of Finance.

In view of the above, C4 Center would add its concerns to those of the PAC, that conflicts of interest and undue influence are major enablers of corruption. We call for an immediate overhaul of the procurement process, with transparency being the aim to deter instances of self-gratification, bribes and potential corruption.

C4 Center urges the Malaysian Anti-Corruption Commission (MACC) to investigate the matter of the VEP contract award, along with any other potentially involved persons to this contract, as a next step to the PAC’s investigation.

Unfortunately, while there are indeed regulations for public procurement, there also exist loopholes, such as Treasury Circular VK713 as mentioned by Liow in his testimony for the VEP contract award case. Liow had testified to the PAC that the ministry decided to use the circular, on the basis that the timeline given to implement the project was short.

Not only is a short timeline not an excuse to cut corners on proper due diligence, the error is further exacerbated in that the contract award was further approved by the Ministry of Finance, which was headed by former Prime Minister Najib Razak at the time, leaving gaping holes as to whether any due diligence was done at all, given the hemorrhaging of public funds under his care .

Ultimately, this could have been avoided with an open tender system, which would have made it easier for the government to be impartial in its due diligence and in awarding contracts based on ability.

While we applaud the PAC for such bold and important findings, and offering much needed check and balance on malpractice and misappropriation of public funds in its role as an external parliamentary auditor, we recognise that more safety nets are essential.  An ombudsman’s office that can assist both the PAC and the MACC in raising red flags during the process and not after a project is completed is worth serious consideration. We learn of such abuse often when it is already too late to catch any potential wrongdoing.

C4 Center pushes strongly for the ombudsman bill drafted to cater to real-time complaints of wastages or leakages in infrastructure and other government sectors under the time of the PH administration, to be put back onto the table for MPs to debate urgently. This bill should not be allowed to go under the radar, and we should not let it disappear from our sight.

To redeem some amount of trust by the people, the PN administration must show the resolve and demonstrate a lot more accountability to the people, especially during these very challenging times.

Released by:
Center to Combat Corruption & Cronyism (C4 Center)

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