Remember the Controversial 'APs'?

I have received a formal reply from the Minster of International Trade & Industry (MITI) on my parliamentary question with regards to "approved permits" for import of vehicles into the country.

My question was:

1. ...jumlah "Approved Permit (AP)" kereta impot yang dikeluarkan pada 2007 berbanding dengan tahun-tahun yang lalu; dan
   
   
2. apakah anggaran jumlah AP yang akan dikeluarkan pada tahun ini dan adakah MITI bercadang melelong AP supaya hasil yang dikutip Kerajaan dapat ditingkatkan.

The reply from the Minister was as follows:

Bagi tahun 2006, jumlah AP yang dikeluarkan ialah 38,545 unit berbanding sebanyak 57,267 unit pada tahun 2005. Manakala bagi tahun 2007, sebanyak 27,838 unit AP kenderaan telah dikeluarkan.

Untuk tahun 2008, berdasarkan jumlah pengeluaran kenderaan tempatan pada tahun 2007, anggaran jumlah AP 2008 ialah 44,168 unit iaitu berdasarkan had bumbung peruntukan AP kenderaan 10% daripada jumlah pengeluaran tempatan bagi tahun sebelumnya.

Buat masa ini, Kerajaan tidak bercadang untuk melaksanakan kaedah lelongan atau tender terbuka Permit Impot (AP) kenderaan. Ini adalah kerana antara matlamat pemberian AP adalah bertujuan untuk menggalakkan dan memberi peluang kepada usahawan Bumiputera bergiat dalam sektor automotif tempatan. Sekiranya kaedah lelongan atau tender terbuka dilaksanakan, hanya sebilangan kecil usahawan Bumiputera yang mampu membida harga lelongan tertinggi. Ini akan menjejaskan peluang pelaburan sedia ada seperti bilik pameran dan tenaga kerja.

It is disappointing that the government has not decided to make the award of APs a more transparent process which is fair and equitable, while at the same time denying valuable funds which can be raised via auction for the national coffers to help the poor and needy. Based on a conservative market valuation of each AP at RM25,000, an open auction will raise more than RM1.1 billion for the country.

The Minister's excuse that a tender system will not benefit the bumiputera businessman and will only benefit those who are already wealthy is totally unacceptable. Based on past records, APs were largely issued to 4 prominent businessmen popularly known as the "AP Kings". In 2005, it was announced that 80% of the APs went to 20% of the companies, many of which were inter-related.

It can hence be argued that the current opaque policy of awarding APs is subject to abuse and is more likely to create an inequitable distribution of APs. Assuming that the AP is limited to bumiputeras, an open tender by qualified bumiputera companies will provide better opportunities for them to compete and grow. To say that only the richest will succeed in the bidding is also wrong because, bidding too high will not be profitable for the businessmen. Hence it's about bidding smart and not bidding high.

It is important that in our pursuit to raise the number of successful bumiputera entrepreneurs, that they are not created via handouts. The AP system should hence be reformed to encourage the competitive spirit amongst bumiputera entrepreneurs, and not instead serve as a barrier to competition.