Friday, February 16, 2007

Declaring Ali Baba Contractors

The Finance Ministry has now made it compulsory for Bumiputra contractors awarded government contracts to sign an official declaration not to sell the project or subcontract the works to others.

Treasury secretary-general Tan Sri Izzuddin Dali said their contracts and registration would be terminated if they flout the rule.

Why don't the treasury and ministry start the process now? They can begin the survey from all the DB/T contracts awarded by JKR and the Ministry of Defence. Every DB/T contractors are registered Bumiputera PKK class A contractors and each and every project, so far in the history of JKR, has been subcontracted to others. Even my good friend Pak Adib did subcontract some of the works to Others (non-Bumi). Abu Sahid of Maju Holding subcontracted the Dedicated Highway to Leighton of Australia who in turn subcontracted the works to Chinese subcontractors. Ahmad Zaki Resources subcontracted their projects along Jalan Kuching-Kepong-Jln Segambut to non-Bumis. MMC subcontracted most, if not all their works to Others (mostly non-Bumis). Perangsang, a state-govt incorporated subcontracted the Matrade project to Lee Fook Sang, Ranhill subcontracted all their works to non-Bumis, in fact, all Bumiputera contrators and suppliers subcontract their works to Others. The Secretary-general used the word: "to Others". That's interesting. The project to procure the Sukhois was awarded to a Bumiputera contractor and was subcontracted to others too. That's how the undertable was paid. If not, the Muslim contractor will have to undertake the undertable transaction which is sinful and against Islam.

It will be interesting to see how the ministry is going to monitor this instruction and declaration. The fact remains that it is impossible for Bumiputera contrators not to subcontract the Works to Others. Even for a Chinese or Mat Salleh organization, they too had to subcontract to others because it is about risk transfer, and it is about ensuring that the right expertise is procured to do a competent job and to ensure the success of the project. No organization is able to do all the works themselves or to engage all the experts and skill workers and professionals as employees. This is the business philosophy called Outsourcing - acquiring skills and expertise from outside the organization to mitigate or transfer the risks and to ensure profitability and growth.

In the world of competitive trade and commerce, no one single race or creed can survive on its own without the service of the others. Even the Saudis, the UAE, Iran, Indonesia, and all other Muslim countries awarded contracts to Others or subcontract projects to Others. Pak Lah should visit the projects at Dubai and Qatar which are all Bumiputera projects and all of which are subcontracted to Others.

I will be excited to see how the ministry will monitor and control the implementation of this instruction and when and what chaos will erupt and destroy the nation's economy. It's tsunamic and it's against the rule of law including Islamic law to issue such an instruction and "Surat Sumpah" as it goes against the principles of justice and good government.

Stupid government and stupid servants!

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