Instead of ending Puspakom's monopoly, the government changed its mind and renewed its contract for another 15 years.
PETALING JAYA: The government had gone against its own decision made in 2009 to end the Puspakom (Computerised Vehicle Inspection Centre) monopoly on vehicle inspection when it extended Puspakom’s contract for another 15 years.
According to a source familiar with the matter, the Cabinet had in 2009 passed a proposal to end Puspakom’s exclusive right and authority to inspect and test motor vehicles after its first 15-year contract was to have expired that same year.
“A proposal to review the contract was put up. The Cabinet was seeking to open up the concession to put an end to Puspakom’s monopoly, ” said the source, speaking on condition of anonymity.
However, the government did not terminate the contract immediately as it took into account Puspakom’s request to consider the large investments it had already made.
The Cabinet finally decided to give Puspakom another five years of exclusive control of the business.
“The ‘monopoly’ was supposed to end in 2014. However, Puspakom would continue to run, but it would have to face competition as others would also be given a chance to bid for the contract,” said the source.
But the decision has somehow been overruled as it was recently reported that Puspakom has renewed the concession for another 15 years (from Sept 1, 2009 to Aug 31, 2024) after the old one expired.
Bernama reported that on Feb 25 Puspakom had filed to Bursa Malaysia its new concession agreement, under which it will pay a pre-determined concession fee to the government as well as a minimum paid-up share capital of RM20 million within the concession period.
It was learnt that at least two companies had indicated interest in providing an alternative service to Puspakom and had bid for the contract then. But they pulled out after Puspakom was given a 15-year renewal.
Exclusive right
Set up in 1994, Puspakom Sdn Bhd, a unit under DRB-Hicom Bhd, was Malaysia’s first national vehicle inspection company. It has 71 branches nationwide performing more than three million inspections annually.
On Sept 1, 1994, the government, then under former prime minister Dr Mahathir Mohamad, awarded Puspakom a 15-year concession agreement for the exclusive right to undertake computerised inspection of commercial and private vehicles. It was due to end on Sept 1, 2009.
The source said that in 2007, the then transport minister Chan Kong Choy had agreed to give a 15-year extension, but it was not finalised as the contract had not officially expired.
“In 2008, there were calls for an end to Puspakom’s monopoly,” said the source.
It was reported that on Aug 31, 2008, Barisan Nasional (BN) and Pakatan Rakyat MPs, as well as NGOs and public transport groups had called for an end to the monopoly.
The then transport minister Ong Tee Keat was quoted as saying that the ministry was considering requests to allow other companies to offer the same services provided by Puspakom.
However, Ong did not say then when a decision would be made.
For years, Puspakom has been plagued by allegations of corruption, mismanagement and lack of quality service.
“To be fair, the government tried to address these various complaints, but had failed as the system was too well entrenched. Puspakom was given a chance to improve its services,” the source said.
ACA swoop
In 2008, Puspakom was in the news when the then Anti-Corruption Agency made a nationwide swoop on its staff.
ACA investigators arrested those who were believed to have accepted money from vehicle owners, charging RM80 for the thumbs-up when inspecting problematic cars and RM400 per vehicle to “pass” a vehicle’s test without it having to be sent to Puspakom.
Reports estimated that these corrupt officials were earning an additional RM1,000 a day or RM55,000 a month “in takings” from vehicles sent to Puspakom.
DRB-Hicom is controlled by powerful tycoon Syed Mokhtar Albukhary. It recently purchased stakes in Pos Malaysia Bhd.
Syed Mokhtar is said to be “the richest Bumiputera corporate figure in Malaysia” and Forbes had in 2010 ranked him as the eighth richest person in Malaysia.
Syed Mokhtar controls the Malaysia Mining Corporation (MMC), which is now involved in a joint venture with Gamuda Bhd on the massive RM36 billion Kuala Lumpur Mass Rapid Transit (MRT) project.
MMC also has stakes in several ports and airports, the country’s largest independent power producer Malakoff Corporation Bhd, water treatment plants, national rice supplier Bernas and national gas supplier Gas Malaysia.
Meanwhile, Puspakom was unable to comment. Its executive officer Hisham Othman said answers to FMT queries were still being drafted.
PETALING JAYA: The government had gone against its own decision made in 2009 to end the Puspakom (Computerised Vehicle Inspection Centre) monopoly on vehicle inspection when it extended Puspakom’s contract for another 15 years.
According to a source familiar with the matter, the Cabinet had in 2009 passed a proposal to end Puspakom’s exclusive right and authority to inspect and test motor vehicles after its first 15-year contract was to have expired that same year.
“A proposal to review the contract was put up. The Cabinet was seeking to open up the concession to put an end to Puspakom’s monopoly, ” said the source, speaking on condition of anonymity.
However, the government did not terminate the contract immediately as it took into account Puspakom’s request to consider the large investments it had already made.
The Cabinet finally decided to give Puspakom another five years of exclusive control of the business.
“The ‘monopoly’ was supposed to end in 2014. However, Puspakom would continue to run, but it would have to face competition as others would also be given a chance to bid for the contract,” said the source.
But the decision has somehow been overruled as it was recently reported that Puspakom has renewed the concession for another 15 years (from Sept 1, 2009 to Aug 31, 2024) after the old one expired.
Bernama reported that on Feb 25 Puspakom had filed to Bursa Malaysia its new concession agreement, under which it will pay a pre-determined concession fee to the government as well as a minimum paid-up share capital of RM20 million within the concession period.
It was learnt that at least two companies had indicated interest in providing an alternative service to Puspakom and had bid for the contract then. But they pulled out after Puspakom was given a 15-year renewal.
Exclusive right
Set up in 1994, Puspakom Sdn Bhd, a unit under DRB-Hicom Bhd, was Malaysia’s first national vehicle inspection company. It has 71 branches nationwide performing more than three million inspections annually.
On Sept 1, 1994, the government, then under former prime minister Dr Mahathir Mohamad, awarded Puspakom a 15-year concession agreement for the exclusive right to undertake computerised inspection of commercial and private vehicles. It was due to end on Sept 1, 2009.
The source said that in 2007, the then transport minister Chan Kong Choy had agreed to give a 15-year extension, but it was not finalised as the contract had not officially expired.
“In 2008, there were calls for an end to Puspakom’s monopoly,” said the source.
It was reported that on Aug 31, 2008, Barisan Nasional (BN) and Pakatan Rakyat MPs, as well as NGOs and public transport groups had called for an end to the monopoly.
The then transport minister Ong Tee Keat was quoted as saying that the ministry was considering requests to allow other companies to offer the same services provided by Puspakom.
However, Ong did not say then when a decision would be made.
For years, Puspakom has been plagued by allegations of corruption, mismanagement and lack of quality service.
“To be fair, the government tried to address these various complaints, but had failed as the system was too well entrenched. Puspakom was given a chance to improve its services,” the source said.
ACA swoop
In 2008, Puspakom was in the news when the then Anti-Corruption Agency made a nationwide swoop on its staff.
ACA investigators arrested those who were believed to have accepted money from vehicle owners, charging RM80 for the thumbs-up when inspecting problematic cars and RM400 per vehicle to “pass” a vehicle’s test without it having to be sent to Puspakom.
Reports estimated that these corrupt officials were earning an additional RM1,000 a day or RM55,000 a month “in takings” from vehicles sent to Puspakom.
DRB-Hicom is controlled by powerful tycoon Syed Mokhtar Albukhary. It recently purchased stakes in Pos Malaysia Bhd.
Syed Mokhtar is said to be “the richest Bumiputera corporate figure in Malaysia” and Forbes had in 2010 ranked him as the eighth richest person in Malaysia.
Syed Mokhtar controls the Malaysia Mining Corporation (MMC), which is now involved in a joint venture with Gamuda Bhd on the massive RM36 billion Kuala Lumpur Mass Rapid Transit (MRT) project.
MMC also has stakes in several ports and airports, the country’s largest independent power producer Malakoff Corporation Bhd, water treatment plants, national rice supplier Bernas and national gas supplier Gas Malaysia.
Meanwhile, Puspakom was unable to comment. Its executive officer Hisham Othman said answers to FMT queries were still being drafted.
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