Transparency builds trust

THE Institute for Democracy and Economic Affairs (Ideas) urges all state governments to institutionalise transparency in public procurement, including those that are awarded through restricted methods. One way to do this is to introduce legislation on government procurement.

We were prompted to raise this issue again following allegations of a conflict of interest that surfaced in the appointment of mobility service providers Asia Mobiliti for the proof of concept of Demand Responsive Transit (DRT) services in Selangor.

Ideas welcomes the explanations given by Ng Sze Han, state exco of Investment, Trade and Mobility, that DRT is a highly specialised field with few companies currently registered to provide the service, and that an additional company, Badanbas, is also involved in the proof of concept trials; Ng also said the companies were selected through a “Request for Proposal”.

We also note that Selangor Mentri Besar Datuk Seri Amirudin Shari has offered to provide complete details under Selangor’s Freedom of Information Enactment, including minutes from the meeting involving the Public Land Transport Agency.

However, the explanations and offer to disclose were provided only after questions were raised about a possible conflict of interest because Asia Mobiliti’s cofounder and CEO, Rama-chandran Muniandy, is the husband of current Youth and Sports Minister Hannah Yeoh.

Disclosures like these should be institutionalised to allow for greater openness and public accountability.

This incident emphasises the importance of the Government Procurement Act (GPA), which would provide rules for various government procurement methods to be competitive and transparent, and signal a strengthened commitment to fiscal responsibility.

The GPA is expected to be tabled by the second quarter of this year, as stated by Deputy Finance Minister Datuk Seri Ahmad Maslan in October 2023.

Currently, there is no specific legislation on public procurement processes in Malaysia, with the processes largely prescribed by a series of circulars and regulations which translates to instructions from the Finance Ministry.

Ideas calls for high standards in procurement transparency, such as disclosing relevant information at every stage of the process by publishing procurement plans, bid invitation details, and details of winning bids at state treasury websites or dedicated online procurement portals. Disclosure requirements should apply to all types of projects, including proof-of-concept, pilot projects, or feasibility studies.

Only six states publish tender results on a centralised portal: Kedah, Melaka, Negri Sembilan, Penang, Perak, and Selangor. The portals, unfortunately, only display information on the results of tender and quotation exercises, not the results from other procurement methods such as the request for proposal Ng mentioned.

According to Ideas senior research director Sri Murniati Yusuf, open tender is not the only procurement method that would ensure competition and transparency. In fact, it is not suitable for procurement of services and works that require specific expertise or qualifications, and where such expertise is not widely available.

The United Nations Commis-sion on International Trade Law, for example, identifies nine other procurement methods to choose from depending on the context of procurement exercises. However, it is important to note that if open tender is not being used as the procurement method, the procuring authority has to provide the justification for choosing other methods.

More importantly, once the selection has been made, the procuring authority must make the information available to the public.

Malaysia’s upcoming procurement law should provide various procurement methods for procuring authorities to choose from while obligating them to carry out the procurement process transparently; the UN’s Model Law for Public Procurement could be used as a reference.

Politically exposed persons are not barred from bidding for or providing government services, but care must be taken to ensure a transparent process that is fair and competitive, providing value for money to the public.

Ultimately, it is crucial that the public can trust the procurement process, and trust can only be gained by processes that are transparent and accountable.

INSTITUTE FOR DEMOCRACY AND ECONOMIC AFFAIRS (IDEAS)

Ideas is a nonprofit research institute dedicated to promoting solutions to public policy challenges.