Why so many SWEETHEART deals for sugar monopolist Syed Mokhtar - Rafizi grills govt

PKR has questioned the motive for government signing long-term contracts with other countries to buy raw sugar at prices currently higher than the market rates, when the sugar industry is monopolised by private companies that will earn the profits.

Its strategy director Rafizi Ramli  told a press conference at the Parliament lobby today that the Domestic Trade, Cooperatives and Consumerism Ministry has confirmed in Parliament last Thursday that the government has entered into such contracts. Further details were not divulged.

With the sugar monopoly given to two companies, one owned by Felda and the other by government-linked tycoon Syed Mokhtar Al Bukhari, Rafizi said the government should allow the private companies to absorb the risks of business and not itself absorb the risks.

"Why did the government enter into long-term contracts to buy raw sugar when all profits will belong to the private companies?" Rafizi asked.

Reveal contract details

The PKR strategy director said that the government must reveal the contract and arrangements it has with the sugar companies, on whether it is mandatory for the companies to buy raw sugar that government has bought through the long term contracts.

He added that since both the companies have special Approved Permits (AP) to import raw sugar themselves, they could still buy it on their own at cheaper market prices and thus make profits after refining and selling the sugar.

"Who is responsible in approving this contract which was not well negotiated until the price is higher than current market prices, which has a direct impact on refined sugar prices in Malaysia?" Rafizi asked.

"Because the government still wants to bear the losses from such a contract, the monopoly for sugar needs to be withdrawn because the companies are not bearing the profit and loss risks of their trade," he asserted.

Blindly doing unnecessary things?

Deputy Domestic Trade, Cooperatives and Consumerism Minister Ahmad Bashah Hanipah told Parliament last Thursday that the long term contract practice has been in place for decades and such an approach was taken in "order to ensure supply of sugar".

This, the deputy minister said, was because sugar was a subsidised item so its supply must be ensured by the government.

However, the sugar subsidy was abolished in the 2014 budget tabled by Prime Minister Najib Abdul Razak in late October.

Mkini