The players benefitting from lucrative multi-million ringgit concessions from the government may have changed, but the same old skit has remained, said Opposition Leader Lim Kit Siang.

In this particular instance, a sequel to an earlier play is now being acted out with minor changes to the cast.

Last year, a company owned by a number of well-connected individuals, including Saleha Mohd Ali, the sister-in-law of ex-premier Dr Mahathir Mohamad, won a lucrative contract to provide security hologram labels on pharmaceutical products.

Critics had claimed that the award to Mediharta was yet another example of the creation of a business opportunity by 'friends of the administration'.

This time, the play revolves around the quiet switch of a RM70 to RM100 million-a-year concession between two companies - from Kod Efisien to Lembah Sari - to provide security-label packaging for locally-made cigarettes.

The switch, said the Singapore Business Times on Tuesday, was only known in mid-July when Lembah Sari's chairperson Haris Onn Hussein informed cigarette companies through a letter that it was taking over the security-labeling facilities that been provided by Kod Efisien for a three-year period.

No reasons were given for the change, said the Business Times . The security labels are used to prevent the sale of counterfeit and smuggled cigarettes.

"It used to be one of the chief complaints against the previous administration of Mahathir that a lack of public disclosure regarding contract awards resulted in an opaque process without open, competitive bidding or public debate," the report added.

Haris is the brother of Education Minister Hishammuddin Hussein.

There appears to be no compelling reasons for the change - Lembah Sari provides the same security equipment and ink supplied by Kod Efisien, which is from the Swiss-owned Sicpa Holdings SA.

"In effect, the (tobacco industry) executives said, it was, like Kod Efisien before it, acting as a middleman in a process that usually resulted in price increases for consumers," said the Business Times.

The old Mahathir walk

Citing the report, Lim said the concession-switch has rekindled questions over how concessions are awarded in Malaysian business circles.

"Is Prime Minister Abdullah Ahmad Badawi walking the talk of a clean, incorruptible, open, accountable and transparent administration ... or is he just walking the old Mahathir walk, with only the change of players but not the play," asked Lim.

According to Lim, among the questions that Abdullah should answer are:

  • What are the reasons, basis and criteria for Lembah Sari, a RM2 company, to take over from Kod Efisien the lucrative concession to security-label packaging for locally-made cigarettes?

  • What was the rationale for the government to have earlier granted a monopoly concession on security labels for all locally produced cigarettes and beer to Kod Efisien in September 2003 without publicity?

  • Why was the concession-switch conducted in total secrecy, completely against the pledge of Abdullah for openness, accountability, transparency and integrity?

    • Last year, the Health Ministry mandated that all registered pharmaceutical products to carry postage-stamp size hologram labels, each with its own distinct registration number, to help in the detection of counterfeits and unregistered drugs.

    The hologram labels, or Meditag, are sold at 5.6 sen a piece by sole authorised supplier Mediharta.

    Many consumer organisations gave it the thumbs-down but the government went ahead and made it mandatory to place security hologram labels on pharmaceutical products, which had inevitably led to a price increase.