Terengganu Oh Terengganu - Where have all the men with brain gone?

29-07-2008: Flush out the rent-seekers (from The Edge Financial Daily)

It boggles the mind that the Terengganu state executive councillors want to save public funds by using prestigious Mercedes Benz E200 Kompressor limousines instead of the home-grown Proton Perdana Executive cars as their official vehicles. No wonder there is such a huge public outcry about the purchase of 14 cars of the luxury German marque for RM3.43 million.

Terengganu Menteri Besar Datuk Ahmad Said’s justification that the Perdana is more expensive to maintain than the Mercedes was rightly met with howls of outrage. Ahmad said the state had spent over RM1 million since 2004 to maintain its fleet of Perdana V6s. The national carmaker has shot back with a fitting rebuttal. Proton Holdings Bhd managing director Datuk Syed Zainal Abidin Syed Mohd Tahir said on Sunday that the state had only been billed some RM78,000 by its authorised service centres in that period. The balance of RM993,620 was spent on 16 cars that were serviced by unauthorised service centres, it has emerged.

The Anti-Corruption Agency has quickly stepped into the act, seizing eight Perdana V6s and questioning nine drivers, civil servants and mechanics about the vehicles.
Clearly, there is much that does not add up in this episode, but the biggest flaws pertain to accountability rather than servicing bills.

The reason why a fuss has broken out in the first place is important. Finance Ministry rules dictate that government leaders, including state executive councilors, are entitled to use Proton Perdana Executive V6s, not any fine wheels they fancy. The good representatives of the Terengganu state government are not at liberty to override the Treasury Circular that says so, period.

Secondly, it is indeed disturbing that the state executive council had deliberated on the purportedly exorbitant maintenance costs of the Perdana without questioning whether the billing could have been grossly inflated. For perspective, Proton has clarified that the average cost of servicing the Perdana, including a change of oil filter, but not other parts, is a down-to-earth RM200. This could reflect one of two unsatisfactory possibilities. Either these representatives collectively have a rather poor sense of financial acumen or they have not exercised their duty of care towards the public coffers as members of the state administration.

In this connexion, we would be missing the woods for the trees if the current exercise in accountability ends in the penalising of a sundry bunch of workshops, mechanics, drivers, administrative officers, billing clerks or other cogs in the wheel who may have transgressed against the law or official procedures.

An unamused public is now also privy to the information that the state government has blithely nullified the manufacturer’s warranty on the majority of its official cars by allowing them to be serviced at unauthorised workshops, and to grossly excessive charges to boot. As a measure of the state administration’s competence, this lapse of judgment speaks for itself.

If there is a silver lining to this sorry episode, it may be that the expose offers an opportunity to the competent authorities to stop the abuse of the public trust that has taken place. Thereafter, a serious effort is needed to wring out from the public procurement system, in particular the vehicle maintenance industry, the culture of rent-seeking that may be pervading government departments, government-linked companies and even the private sector.

It would be enlightening to estimate the amount of money that is lost through such leakages.