KUALA LUMPUR: Eradicating bid-rigging practices could save the government up to 15 per cent on its annual expenditure, the Malaysia Competition Commission (MyCC) said.

Its chief executive officer, Iskandar Ismail, said cartels involved in bid-rigging sometimes offered prices lower than the estimated costs in government procurement, resulting in subpar services.

He said another common tactic among bid-rigging cartels was subcontracting government projects to other companies within their network, allowing them to reap the profits without performing any work.

The government, he said, would then have to bear additional financial costs if the projects were not up to standard or delayed.

According to MyCC's estimates, he said, a fair and transparent tender process, along with plugging leakages in public contracts, would help the government save up to 15 per cent on its annual expenditure.

In the 2024 Budget, the government allocated RM393.8 billion for public projects, including RM90 billion for development expenditure and RM2 billion in contingency savings.

A 15 per cent saving would amount to RM13.5 billion, which could facilitate the construction of 45,000 affordable housing units, each priced at RM300,000.

Iskandar said inefficiency and problems caused by bid-rigging would prevent the government from delivering on its promises, ultimately harming the ecosystem of related industries.

"For example, if a public hospital project is delayed due to an incompetent tender recipient benefiting from a bid-rigging arrangement, it would create a knock-on effect on existing hospitals due to increased demand from patients, leading to poorer service and inefficiency."

Since taking office in November 2022, Prime Minister Datuk Seri Anwar Ibrahim has been vocal in combating leakages in government procurement.

In January last year, he said the country could save up to RM10 billion from leakages within the government procurement system.

In July, ahead of the 2025 Budget, Anwar, who is finance minister, said he had not given up his fight against cartels and monopolies and had placed the issue at the top of his agenda.

In August, he called for better coordination among enforcement agencies to effectively tackle revenue leakage.

https://www.nst.com.my/news/nation/2024/09/1109352/mycc-ending-bid-rigging-could-save-govt-rm135b