Sand monopoly, the cronies are at it again

By Datuk Yong Teck Lee

KOTA KINABALU: The cronies are at it again. After failing to monopolise the scrap metal business three years ago, cronies have again reared their ugly heads to grab the extraction and supply of sand to the construction industry.

Using the same lame excuse of lax enforcement against "thefts of scrap metal", the political masters have now come up with thefts of sand as the excuse to put all the rights to sand extraction in the hands of Sabah Economic Development Corporation (SEDCO).

This is a repeat of the failed attempt in 2008 to let Superpanel Sdn. Bhd., a subsidiary company of the Sabah Housing and Town Development Board (LPPB), monopolise the scrap metal business.

At the time, the scrap metal business was lucrative. The same excuse about metal thefts and protecting the government's interests was used for monopolising the business. But eventually, the idea was dropped due to the fall in scrap metal prices. The decision on the monopoly had nothing to do with the government's interests. It had all to do with greed and abuse of power.

This sand monopoly could hold the construction industry to ransom, impose arbitrary prices and payment terms, including hidden costs. Like the import of vehicles using APs (Approved Permits), quotas could be allocated to sub-cronies to buy and sell sand, thereby driving costs.

How can SEDCO enforce against sand thefts? It has zero enforcement personnel and no statutory power to seize machineries, investigate, arrest or prosecute. So, people are entitled to draw their own conclusions. Is it a coincidence that the Chairman of SEDCO, the assemblyman for Membakut, is a family member of the Chief Minister?

Monopolies fuel inefficiency, stifle economic growth, add to hidden costs and kills private sector initiative. All economists know this. This is why many countries have anti-monopoly laws. If the Sabah government were to go ahead with the sand monopoly, then sand operators and consumers can complain to the anti-monopoly Malaysia Competition Commission under Section 15 of the Competition Act 2010 that takes effect on January 1, 2012. Our anti-monopoly laws seek to protect consumers, businesses and the economy. Under Section 4(2)(b), it is an offence to monopolise the market as well as the SOURCES OF SUPPLY, which in this case is sand supply. It is understood that the Competition Commission will investigate the MAS-Air Asia share swap deal that has created a super monopoly of the aviation industry, leading to reduced flights, reduced destinations, higher fares and cancellation of Tiger Air flights to Sabah.

Bad policies will affect the economic wellbeing of the whole state. After casting clouds over the heads of birds nest farmers and the failed implementation of the Money Lenders Act, the government now wants to impose a sand monopoly. This is another slap in the face for the business community which is already struggling against rising fuel prices, reduced banking credit and uncertainties over the global currency crisis.

The only sector sustaining the Sabah economy is oil palm, but which is now increasingly affected by foreign workers issues and worsening roads.

By Datuk Yong Teck Lee is Sabah Progressive Party (SAPP) President