So long as SACOFA remains a private company 50% owned by CMS group and that also a regulator on ICT infrastructures in the State of Sarawak, any allocation of State fund for the development of ICT infrastructures is a classic case of cronyism.
To have a private company to be the regulator and at the same time involved in the business in which that company regulates, that is cronyism and conflict of interest at the highest degree and it is unheard of in any of the developed nations.
At the moment, all telco companies are not allowed to build or install any transmission equipment in the State except with the prior permission from SACOFA. Previous telco towers built by Telekom, Digi or Maxis were all made illegal overnight by the amendment of the State law and policy unless they have the licence from SACOFA. To obtain that licence, they have to pay SACOFA hefty licence fee. Even if these telco companies wish to rent a roof from a private shopowner to put up their transmitting equipment, they have to obtain a licence from SACOFA and have to pay hefty fees for such licence.
In most cases, SACOFA directs these telco companies to dismantle their own transmission equipment and compels them to rent the towers from SACOFA.
If SACOFA is a wholly state-owned company, such modus operandi is at most an interference of the free market operation which stifles market competition thus resulting in inefficient allocation of resources.
However, when SACOFA is now a private company, controlled by CMS group (a private company with profit-making as its main objective and controlled by the Sarawak Governor’s family), that is classic textbook case of cronyism.
Furthermore, the cronyism element of SACOFA is further enhanced when the State Government, shortly after the acquisition of the 50% SACOFA shares by CMS group, announced that the State Government will allocate RM1 billion into ICT infrastructures projects, with 5,000 telco towers to be built.
Just a few questions for Abang Jo will suffice to prove the cronyism element of SACOFA in Abang Jo’s said announcement:
- Who decides the exact locations to build the towers?
- Who appoints the contractors to build the towers?
- Who decides how much to pay the contractors to build the towers?
All these questions point to one answer, ie. SACOFA which since 2016, is now 50% owned by CMS Group. With CMS holding 50% share in SACOFA and having operational control of the company, this RM1 billion worth of contracts will literally be controlled by CMS Group.
If Abang Jo truly wants to do away with the elements of cronyism in the development of ICT infrastructure in Sarawak, he must do the following:
- remove the regulatory power from SACOFA;
- remove the monopolistic control of SACOFA over ICT infrastructure projects and open up the field to other players in the construction and tele-communication industries; and
- A government agency to take charge of the overall planning and tendering process for the ICT infrastructure projects and to be supervised by a select committee of ADUNs from both sides of the House.