Thousands of Malay contractors, who receive special privileges, are believed to have "sold" government contracts worth millions of dollars to others for quick gains, a report said today.

National Malay Contractors Association secretary-general Jamaluddin Abdul Rahim told The Star newspaper that some 16,000 contractors had been involved in the scam.

He said 50 Malay contractors blacklisted Wednesday by the Entrepreneur Development Ministry for selling their projects were "the tip of the iceberg."

Jamaluddin said he had reports that some Chinese businessmen had recruited a group of 10 to 15 Malay contractors each to secure projects, especially those awarded by local councils and the public works department.

These contractors would then "sell" their contracts to the businessmen for about five percent of the total project cost or even less, he said.

Jamaluddin branded the contractors as "traitors" to the government and the Malay community, saying they had defeated the government's purpose of helping them.

"They are not only tarnishing the image of Malay contractors but are even willing to sell their dignity for a small price," Jamaluddin said.

"They always complain of not getting any projects from the government but when they are given one, this is what they do."

Economic policy

Under an economic policy imposed in 1970 after bloody racial riots, Malays and other indigenous groups who make-up some 60 percent of the country's 23 million population get economic, educational and other benefits in a bid to narrow the wealth gap with the Chinese minority.

But critics say three decades of preferential treatment have created a subsidy mentality, and Prime Minister Mahathir Mohamad often berates Malays for being lazy and seeking shortcuts to wealth.

Mahathir, who has ruled the country for 21 years and is to step down in October 2003, told Malays during his party congress in June to learn from the Chinese, warning that they were still weak and would not survive if their privileges were withdrawn.

The government has been experimenting with plans to reduce protection for Malays, starting in education, to make them more competitive.

In May, it allowed a 10 percent quota of ethnic Chinese and Indians into government junior colleges, for decades the preserve of Malay students only.

This followed the implementation of meritocracy for entry into public universities, replacing a previous race-based quota system. AFP