In our posting seeking not to misunderstood Domestic Trade, Cooperatives and Consumerism (or the Malay acronym KPDNKK) Minister, Dato Hasan Malek [read here], this blog dropped a hint on an upcoming scoop related to an impending fuel subsidy management system said to be implemented on September 1st.
One source deep inside MOF suspect that it relates to the fuel subsidy card system that will be implemented and someone have been confirmed the contract. Her fear is that all these raids are only for show to get the public to agree. It will end the moment the fuel card contract is awarded.Since TV3 in Bulletin Utama yesterday evening [try at Tonton.com here] reported Hasan Malek welcoming any suggestion to their on-going study but revealed that a decision is coming up soon, it only confirmed the information of our MOF source.
Another source told us yesterday that the EPU under Dato Abdul Wahid Omar had pre-decided that the fuel card system will be used despite Hasan's invitation to any suggestions. In addition, the fuel subsidy management system has been guaranteed to a consortium led by Datasonic Berhad.
High government officials with vested interest and neo-liberals with insidious agenda are not interested to plug the leak on subsidised fuel to lessen the government subsidy burden but are only interested to make a buck out of public misery.
Agenda to abolish subsidy
It is strongly believed that the consumers' subsidy allocation will depend on their monthly income and car size used. In our past posting then, it was mentioned that many parties have reservation to the system.
Penang Gerakan expressed concerned to the possibilities of widespread abuse and smuggling and possibilities of system problems to consumers. [Read FMT here] There is the political opportunist opposition claiming concern for the poor. [Read opposition news portal Malaysia Chronicle here].
And, there are the self-centred neo-liberal capitalists demanding the total abolishment of subsidies based on the expected lax enforcement and exploitative consumer behaviour. [Read FMT here]
Extracting from FMT, Maybank research reported:
According to Maybank’s research unit, Malaysian taxpayers tolerate up to RM7.0 billion in subsidy leakages every year as the result of diesel and petrol smuggling to foreign countries.Just stop leakage
The International Monetary Fund (IMF) meanwhile estimates that the top 40% of Malaysians that fall in the high-income group enjoy 80% of the nation’s fuel subsidies.
A total of RM24.8 billion is budgeted for fuel subsidies in 2014, but out of this, only RM3.5 billion is projected to benefit those in the low-income group after taking into account the leakages from fuel smuggling.
In reality only 14.1% of the fuel subsidy is benefiting the low-income group while 28.2% is lost to smuggling and the remaining 57.7% is enjoyed by the high-income group who have more and bigger capacity vehicles.
And the TV3 news reported that out of the 18.6 billion liter of Ron 95 petrol used last year, some 6 billion liter (or 32.25%) was misued.
Mingguan Malaysia dated June 15 (page 12) published the subsidy spent by government on fuel. There was a strange jump from RM9.065 billion in 2009 to RM20.275 billion in 2010 which eventually reached RM24.726 billion in 2012 and RM23.458 billion in 2013.
Given our 5% GDP growth rate and about the same growth rate of vehicle ownership, the value of leakage could be about RM15 billion or 62.5% against RM24 billion subsidy.
If there are seriousness on the part of KPDNKK, APMM, MACC, Police, and various enforcement agencies and authorities, the public does not need to suffer a higher energy cost from subsidies being taken away.
Both the low and high income voters can all savour the nation's prosperity. However, the abuse by the greedy few and the lax by authorities and enforcement agencies are denying the rest of the population a comfortable standard of living.
No ploy of getting some half bake NGO with non existent network of members could convince the public. [Read of JMM here]
Have Wahid Omar considered this or he is in sync with the pro-IMF Maybank report to just simply abolish subsidies without thinking deep enough of the economic, political and social ramification?
From what Dato Idris Jala, who is due to retire from his Senatorship and Ministership, have been preaching against subsidy and pro-TPPA, corporate man Wahid will likely be subservient to the interest of the "company" over the "consumer and staff".
His concern will only be the Government's P&L and balance sheet.
Our source said one Chinese businessman known as Chong have been going around telling everyone in the industry that the contract will surely go to his consortium. Thus other potential bidders should save their time from trying to put up a tender.
It could be his way of psyching his competitors. He is most likely to claim that Hasan Malek's statement in TV3 is merely a smokescreen. Already he claimed PM has confirmed awarding the tender to his consortium last week.
The consortium concerned is known as Fuel Subsidy Sdn Bhd and the main player is public listed company, Datasonic Group Berhad. [The company's Investor Relation webpage is here.]
The Managing Director of Datasonic is a reknown Accountant and close to Dato Seri Anwar Ibrahim by the name of Dato Hanifah Nordin. He is the largest shareholder of Datasonic. As of the 2013 Annual Report, he owns 15.49% and via his controlled company, DiBena Enterprise Sdn Bhd, he controls 26.99% of Datasonic. [See here]
DiBena was believed to have beaten Iris Corp Bhd, the creator of MyKad [read The Star here], for the second tranche of the MyKad contract. The Bumiputera company, DiBena procured the contract and the listed vehicle Datasonic was contractor for the 2010 contact and 2013 to 2014 extension. [Read here, The Edge here and The Star here.]
IA is a spin-off from Ernest & Young Cap Gemini when the partner, Dato Dr Hamzah Kassim left to be on his own.
Much have already been exposed of the opportunistic endeavour of Anwar sympathier and member of NEAC, Hamzah Kassim. [Search for previous postings.]
In a Bernama report dated June 23rd, Hasan Malek claimed to want government's procurement process be efficient and transparent in order to curb leakage and wastage [read here].
However from what was gathered, NEAC may have predetermined the system and company. The other 5 or 6 bidders can only work with Fuel Subsidy.
These information are revealed to pre-empt any such attempt for unethical and unfair practise. If there is really a need to rationalise subsidy over major crackdown of leakage, then allow everyone a fair chance so that the public can get the best at the least of cost.
There are other companies like Sapura and MEPS who could provide the payment gateway, infrastructure and transfer system.
As far as we are concerned, Government should not waste time to develop another more costly card system but use the existing MyKad.
For security of information, it must be only local companies and preferably locally designed system used.