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An end to Syed Mokhtar’s monopolies?
Stephanie Jacob 
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WHILE Tan Sri Syed Mokhtar Al-bukhary may hold several monopolies, there are monopolies or concessions held by other private citizens or government-linked entities which are also likely to come under review.

Many of these concessions have or could be subject to fresh open tenders under the current government.

The government recently ended the 25-year concession held by Spanco Sdn Bhd for the rental or lease of official vehicles for the government, after the company’s contract extension ended on Dec 31, 2018.

Spanco held the contract from 1994 and despite the previous government launching a review following concerns that it was overpaying, continued up till 2018. A news report suggested that the government paid a total of RM221.6 mil to the company to rent a total of 10,963 Proton cars for official use in 2017.

The concession is now up for grabs via an open tender and it is seen as a lucrative contract given that the government requires a significant amount of vehicles.

Meanwhile, YTL Communications Sdn Bhd’s concession to provide over 10,000 schools nationwide with internet connectivity under the 1BestariNet project is expected to end upon its expiry in June 2019.

Deputy Education Minister Teo Nie Ching said last year that the ministry was unhappy with the level of service and says a fresh tender will be called early this year.

YTL was awarded the RM4.45 bil contract in 2011 to implement the 15-year project. It was tasked with rolling out services to reduce the digital divide between rural and urban students. However, it was called out by the Auditor-General in 2016 after it failed to deliver internet connection to more than 4,000 schools.

While these concessions are to be re-tendered, the government has so far not indicated if it will split the contracts up to multiple players or maintain a monopoly in this area.

 

Government-linked monopolies

Several monopolies held by government-linked entities could also come under the microscope. For example, Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin has said she wants to introduce more competition in the power sector across the whole value chain.

Tenanga Nasional Bhd, which is controlled by national sovereign fund Khazanah Nasional Bhd, holds the monopoly for the distribution of electricity. So far, Yeo has refrained from commenting on whether the national utility player will retain that advantage.

However, liberalisation and restructuring of the power sector might lead to significant changes.

Meanwhile, Malaysia Airports Holdings Bhd (MAHB) owns all but one of the airports and short-takeoff and landing ports (STOLports) in the country. The monopoly has been criticised by airline companies for giving the operator too much clout. AirAsia Bhd had proposed to build a low-cost airport in the past but it was shot down by the government.

However, MAHB’s concession is unlikely to end as it comes with a significant social obligation of providing air connectivity to rural communities. MAHB uses the proceeds from profit-making airports to cross-subsidise loss-making operations.

The latter are mainly its rural airports and STOLports. Should the sector be liberalised, there would be the all-important question of who would take on the social aspects of the business.

 



This article first appeared in Focus Malaysia Issue 324.