Pejuang worried 5G SPV may take the 1MDB path

 

The government's decision to allocate 5G spectrums through a state-owned special purpose vehicle (SPV) is worrying, considering the recent track record of government-led ventures, Parti Pejuang Tanahair economic bureau chief Armin Baniaz Pahamin said.

"Over the years, we have seen the government spending billions of taxpayers’ money to cover the bailout of many government-linked companies owing to gross inefficiencies and failed leadership.

"Recent history has shown how a government-owned entity like 1MDB was seriously misused to fulfil personal and political gains.

"How can this current government guarantee that this SPV will not become 1MDB 2.0 and become a vehicle to further the interest of the few?" Armin asked in a statement.

The former Proton Edar Dealers Association Malaysia president noted that Fitch Solutions, the research arm of Fitch Group, had also raised concerns about the 5G model the PN government was adopting.

Fitch Group is the parent of Fitch Ratings, which determines the creditworthiness of countries.

Fitch Solutions said the state-led SPV controlling the 5G spectrums, instead of allowing private firms to directly tender for them, raised transparency issues and corruption concerns. 

The Malaysian Communications and Multimedia Commission (MCMC) gave its assurance that the SPV would be transparent.

However, Armin questioned if the MCMC is capable of providing oversight on another government entity, due to a conflict of interest.

"The question also remains on whether regulatory oversight can truly be implemented by MCMC fairly, taking into account the regulator will be overseeing a government-owned entity whose shareholders may be sitting members of the cabinet, thus creating a conflict of interest," he said.

Armin also raised concerns on whether the SPV would have the necessary experience to roll out the 5G network.

"Even as professionals are appointed to run the SPV, what are the safeguards in place to ensure that the management will be free from political pressures?

"As far as current trends dictate regarding key positions in government-linked companies, politicians will invariably occupy board seats of this SPV as a way to curry favour among MPs," he said.

Armin urged the government to clarify how it intends to raise RM15 billion for the 5G rollout as well as the governance structure and oversight committees that will be in place.

"Furthermore, as the SPV’s responsibilities are of great interest to the public, there is a need for MCMC to conduct a public inquiry on this matter in tandem with Article 55 of the Communications and Multimedia Act 1998.

"Unless further details are outlined to comfortably guarantee that this SPV will not be misused and become a conduit for personal gain, as well as a public inquiry is conducted, Pejuang urges the government to retract the intention to form an SPV and immediately call for an open tender to ensure our resources are managed efficiently for the well-being of the rakyat and country, as well as to secure a better future," he added. - Mkini