Legalised get-rich-quick schemes

IF YOU want to buy vegetables, you would not be going to the hardware store. If you have a heart condition, surely you would not be going to see a gynaecologist. If you are moving house, you won’t want a fleet of Alam Flora dump trucks to ferry your belongings. If Idris Jala or Tony Fernandes want to buy more planes, they would be talking to the people at Boeing in Seattle or Airbus in Toulouse – not some local company whose registered interest is in the area of food catering.

Today, medical equipment running into millions are supplied to government hospitals by "registered" contractors who do not know which end of the stethoscope goes between the ears. When things go awry or when there are problems with the equipment, there’s little or no after-sales-service, resulting in some being cannibalised. Hence there are hundreds of machinery lying in the stores of government departments and agencies because "there are no spares".

While no one is against the government’s affirmative policies, it is sad that people with no experience or the resources have ended up as "middlemen" and "agents" for multi-million ringgit purchases. They just add a percentage, most of the time running into double figures, for "facilitating" the arrangements to supply goods or services. No one will begrudge them if they have an inventory of spares and qualified people to service the equipment, but when they are no more than one or two-man operations, it becomes evident that these are modified versions of the get-rich-scheme a la Pak Man Telo. Not only prices go up, but after the cheques have been cleared, they just disappear. A case in point: A government agency wanted a few fax machines. The registered contractor went to an electrical shop, ordered them at RM545 each and subsequently billed the agency for RM1,600 each. If this was bad enough, when two of the machines broke down two months later, the agent made himself unavailable.

There are several reasons to do away with such a system. First, there’s a cost element. The middleman’s cost, commission, finding fee or whatever you call it, is added on to the cost which in turn is passed on to the end-user, in this instance the government. Secondly, the manufacturer washes his hands off when things go wrong because he is not privy to the contract with the buyer. He only has a deal with the supplier. Thirdly and more importantly, as in many equipment which need to be rectified or repaired urgently and which need expert skills, the middleman is unable to provide them.

Everyone knows that tenders were called to replace the baggage handling system at KLIA and everyone knows that there are no local manufacturers. Hence, it opened the doors for a dozen or so "local representatives" of foreign manufacturers. And it is no secret that each added a few million ringgit in the quotations. So, wouldn’t it be cheaper to call for an international tender from manufacturers and make the selection after evaluating their experience, after-sales-service and other relevant factors?

But then, the opportunity for officials to go on a lawatan sambil belajar to "familiarise themselves" with the manufacturing process would be lost. After the official visit, they can be feted to sumptuous dinners and probably, gold at Valderamma or St Andrews.

The time has come for us to evaluate the methodologies of the past and if they have achieved their intended objectives. Have they produced businessmen who have acquired acumen over the years and are ready to walk alone without crutches or have we created an Ali-Baba culture where contracts and sub-contracts are traded at the drop of a hat? Have we managed to reduce costs to the government or have we realised that such a system brings an added cost to taxpayers?

Remember the RM40 screwdrivers and the RM350 car jacks? What about the 30-inch TV which was bought for RM9,000 when the same model could be picked up for less than RM2,000 at Carrefour, Giant or Tesco? Several other observations made by the auditor-general are standing monuments of a system that is rotten to the core. It adds credence to claim and expound the theory that the auditor-general’s report is in reality, a catalogue of shame and inefficiency that have set root in the administration system.

With the government’s directive to cut down on wasteful expenditure, wouldn’t an overhaul of such systems be the first steps? (The Sun)

R. Nadeswaran argues that the more one reads the AG’s report, the more he sees the need for a re-look at the system which legitimised abuse and misuse. He can be reached at [email protected]