Former transport minister Ong Tee Keat has questioned the rationale behind the 15-year extension for Puspakom’s exclusive concession to inspect all vehicles in the country.

He claimed that the government had made a decision in 2009, while he was in the office, to extend the concession period for another five years, followed by opening up the inspection market for free competition.

NONE According to an exclusive report by Chinese daily China Press in January, the cabinet had made an unusual decision to extend Puspakom’s concession for 15 years until 2024. Before this, the concession had always been extended for only five years.

Ong ( right ), who was transport minister and MCA president from 2008 to 2010, claimed that in 2007, which was two years before Puspakom’s concessionaire expired, the transport ministry had reached an agreement with the company to extend the concession for 15 years.

“When I took over the office in 2008, just before the contract expired, I suggested to the cabinet to review the agreement.

“Eventually the cabinet agreed to give only a five-year extension because the company had invested funds to set up inspection centres in rural areas which were non-profitable,” he told Malaysiakini when contacted recently.

Ong explained that the reason to shorten the extension was to pave the way for more competitors to enter the market after five years.

“Competition can bring improvements in service quality. I’m against all forms of monopoly,” stressed Ong, adding that the ministry had received a significant number of complains against Puspakom, including corruption allegations.

Written reply from PM’s Department

The Pandan MP had raised the question in Parliament and received a written reply from the Prime Minister’s Department.

The department conceded that the initial proposal was to grant a five-year extension followed by a review.

azlan However, after reconsidering the power and functions which the government had given to Puspakom, a 15-year extension starting from Sept 1, 2009, was approved.

These power and functions are: (1) the inspection service carried out by Road Transport Department (JPJ) and related power, (2) to take over JPJ’s staff involved, and (3) the authority to issue an inspection certificate for commercial vehicle.

The department added that the extension had included new conditions such as key performance indicators to protect the consumers’ interests and that the government would be free from all business risk and liability.

It also stressed that Puspakom’s service charge will only be revised every five years and that the government would have the final say in determining any fee hike.

“If the hike is not approved, the company would not be allowed to claim any compensation,” stressed the department.

The monopoly of vehicle inspection service by Puspakom since 1994 has received much criticism. This is compounded by complaints that the services provided are below par.

The private concessionaire was also embroiled in a corruption scandal in 2008 when 28 of its employees were arrested by the then Anti-Corruption Agency (ACA) for allegedly receiving bribes.

Additional 14-point inspection

Despite all the controversies, the Domestic Trade, Cooperatives and Consumerism Ministry decided to make it compulsory for all used cars to be put through an additional 14-point inspection by Puspakom before being transferred to the new buyer, starting June 15.

NONE The additional inspection will add another RM90 fee to the seller on top of the current compulsory four-point inspection which costs RM30.

Used-car dealers had held a demonstration on Tuesday against the new rule, claiming that it is unnecessary and only benefits Puspakom. 

Puspakom is a wholly-owned subsidiary of DRB-Hicom, one of Malaysia’s largest conglomerates which is controlled by tycoon Syed Mokhtar Albukhary, a businessperson favoured by former prime minister Dr Mahathir Mohamad while in office.

Besides that, Ong was also taken aback when he learnt that the additional inspection was imposed by the Domestic Trade, Cooperatives and Consumerism Ministry instead of the Transport Ministry.

“Usually all matters relating to vehicle safety are decided by the Transport Ministry after discussions with the Road Transport Department (JPJ), Road Safety Department (JKJR), Malaysia Institute of Road Safety Research (MIROS) and other stakeholders such as used-car dealers,” he added.

“My jaw almost dropped when I learnt about it.”

The Federation of Motor and Credit Companies Associations of Malaysia (FMCCAM), which spearheaded the protest against the new inspection rule, had claimed that its members were not consulted over the new rule.