Something stinks in fisheries deal

The Ministry of Agriculture and Agro-Based Industries must explain its decision to privatise Safma, a subsdiary of Sabah Agriculture and Food Industry Ministry in a “zero value” deal.

KOTA KINABALU: Why has Sabah Fish Marketing Sdn Bhd (Safma) been privatised when its main function is to boost and help the fishery sectors to grow?

Posing this question, Likas assemblyman Junz Wong said the privatisation exercise “literally offers zero valued added benefits to the fishery sector”.

“Isn’t it ironic that Safma, with the purpose to boost and help the fishery sectors to grow, has taken steps to hamper the growth of the fishery industry?” he asked.

Starting earlier this year, the agency privatised its water service and followed by ice supplies in mid-June, causing higher charges on fishing trawlers.

“Everything goes on as usual after privatisation. There is no added facility, no value added benefits or advantages.

“The only thing that has changed after privatisation is the higher prices for fishery sectors to pay for Safma’s privatised services,” said Wong.

Those in the industry complained that water supply which used to be RM5 per cubic metre in December last year is now RM7 whereas the normal cost is RM0.90 per cubic metre.

On June 18 June, Safma also privatised its ice supply service and the private company has imposed new charges on ice supply, Wong said.

Before privatisation, a block of ice (equivalent to three packs of ice) costs RM15.

During high demand, when Safma had insufficient supply, fishing boat owners were forced to order ice supplies from third parties and each lorry delivery would cost RM40 per entry into the jetty area.

Minting millions

Since the privatisation, a block of ice costs RM18 and each pack of ice comes with a surcharge of RM1 on top of the RM40 per lorry entry paid to Safma.

“To understand this, we must look at this illustration. There are altogether 130 fishing ships operating at the Safma jetty (and) 40 of the 130 ships are relatively larger ships,” said Wong.

“During high season, each ship may need to use up to 350 packs of ice each day. During low season, each ship will still use at least 150 packs of ice.

“So the average usage of ice supply for each bigger ship is 200 packs of ice.

“Fishing ships do not operate everyday due to weather conditions and so forth so (the) average operational fishing days is calculated at 20 days per month,” he explained.

On an average of 200 packs of ice per ship and with 40 ships, that gives a figure of  8,000 packs of ice per day and if there were 20 operational days per month, that would equal 160,000 packs per month.

Assuming that fishing ship owners buy all 160,000 packs of ice supply from Safma’s privatised company with the average daily ice usage of 8,000 packs at RM6 per pack that would come to RM48,000 per day while average monthly ice usage of 160,000 packs would cost RM960,000 per month.

“That is at a staggering figure at RM11.52 million per year,” said Wong.

However, he said, assuming that fishing owners buy all the 160,000 packs of ice supply from outside Safma Jetty, every pack of ice would be charged an additional RM1 which means this private company would earn RM160,000 every month from the ship owners or RM1.92 million per year.

“The above illustration has only taken into account 40 larger ships. What would the figure be when we include all the other ships altogether? Now is this fair? What is the justification?” asked Wong.

Disappointed fishermen
Wong also demanded to know details of the concessions awarded.

“How much is the concession agreement for these privatisations? How long is it for? Is there competitive open tender?” he asked.

Wong said the fishery stakeholders were very disappointed that they were not invited for discussions before implementation of the privatisation of the service.

He pointed out that Senator Yunus Kurus, when debating a motion on the Supplementary Supply Bill (2012) 2013, had even urged the Ministry of Agriculture and Agro-Based Industries to implement measures to cut out middlemen as they did nothing to improve the income of fishermen.

“Isn’t such privatisation another form of middlemen system? As a result, prices of fishes will increase and burden will eventually be passed down to the consumers,” said Wong.

He said the services must be terminated immediately and appealed to the agency’s newly appointed chairman Jaujan Sambakong to look into the matter.

Jaujan had reportedly said at his first Safma Board of Directors meeting that he would look into Safma’s shortcomings and its role in boosting Sabah as a major hub for fisheries in the region.