DAP wishes to seek clarification on Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz’s announcement on March 16 that the Malaysian government via its 100%-owned company Digital Nasional Bhd (DNB) will maintain the single wholesale network (SWN) model in the country’s planned rollout of the fifth generation (5G) mobile telecommunication network and at the same time, offer 70%-ownership in DNB to mobile network operators (MNOs) in the country. Zafrul said that whilst maintaining the SWN model, there will be no additional financial implications in relation to DNB’s contract with appointed 5G network hardware provider Ericsson Malaysia Sdn Bhd.
Zafrul added that Ericsson has drawn up an implementation plan by optimising contract work and services for local vendors, with an estimated 61% prioritised for Bumiputera interest. The government should clarify this increase to 61% of bumi interest, whether this is now the new benchmark for major government procurement contracts. For the East Coast Rail Link(ECRL) the previous BN government had set Bumi interest and participation of local vendors at 40%.
Bumi companies can still bid for the non-bumi portion through open tender. To unilaterally expand to 61% is a major policy change that should be done with full consultation with all stakeholders because it deals with issues of justice or fairplay, encouraging competitiveness and whether it helps to work towards a level playing field.
There had been attempts to change the 30% bumi policy especially in equity holdings of non-bumi companies when I was Finance Minister between May 2018 to February 2020. However, the Royal Customs Department had issued a letter stating that existing freight forwarder companies that had been operating for decades can stick to the 30% benchmark instead of surrendering control of their companies to comply with proposed 51% bumi equity requirement.
In the said letter issued on 24 October 2018, the Customs Department disclosed that the Ministry of Finance had agreed that freight forwarders who were issued licenses before 1990 did not have to lose control of their companies and dispose off their shares to comply with the 51% bumi equity ruling. Freight forwarders formed after 1990, were required to have 51% bumi equity for issuance and renewal of licenses.
Unfortunately, this ruling is under threat from the current government, that is attempting to forcibly compel freight forwarders that had been operating before 1990, to comply with the 51% bumi equity ruling. First, it is unfair to withhold any renewal of licenses of freight forwarders for not complying with the 51% bumi equity after they have been operating their business for decades to just suddenly surrender control of their companies.
Second, there are double-standards in forcing this 51% bumi equity ruling only on locally-owned companies, but not foreign-owned ones approved in 2015. Where then is the “Keluarga Malaysia” concept of Prime Minister Ismail Sabri, when foreigners are better taken care of than Malaysians? Giving special privileges to foreigners at the expense of locals is clearly contrary to the Federal Constitution. Further applying such a ruling retrospectively, whether back to 2015 or 1976 is clearly unconstitutional.
And now there is a new benchmark of 61%. Can the government or MCA President, MIC and GPS Ministers clarify when this was approved in Cabinet?