A former Negri Sembilan state executive councillor, Mohamad Rais Zainuddin, is a director of a company awarded the largest government quota to supply padi seeds to the farmers despite allegations that the company failed to meet tender criteria.
According to information obtained from the Companies Commission of Malaysia (CCM), the former Chembong assemblyperson was in June 2011 appointed one of Kilang Beras Seri Merbok Sdn Bhd's four directors.
Rais had openly criticised Negri Sembilan Menteri Besar Mohamad Hasan when dropped as a candidate for the 2008 general election.
The other three directors of Kilang Beras Seri Merbok are Abu Samah Hashim, Pek Ling Lin and Mohd Yusmizar Ismail, with the shareholderss being Mohd Yusmizar Ismail, Pek Eng Hoay, Pek Woei Fong and Abu Samah.
The company is one of the 10 padi seeds suppliers granted contracts worth RM164.8 million by the Agriculture and Agro-based Industries Ministry to supply padi seeds to farmers for two years from 2013.
Kilang Beras Seri Merbok topped the list with an annual quota of 22,000 tonnes, followed by Haji Md Nor bin Haji Abd Rahmah (M) Sdn Bhd (HMN), which bagged the quota for the supply of 20,000 tonnes a year. The quotas for the other eight suppliers are all less than 10,000 tonnes.
PAS vice-president Mahfuz Omar in Parliament last week revealed a leaked letter , purportedly sent by the Finance Ministry to the Agriculture Ministry.
The letter laments that tenders allocated for the supply of padi seeds under an Agriculture Ministry programme were awarded to suppliers who had failed to meet the tender criteria.
These ‘unqualified' suppliers are ,however not named, in the Finance Ministry's letter.
HMN has conceded that it won the tender despite not fulfilling one of the tender criteria, while a spokesperson for Seri Merbok refused to comment when contacted, preferring to leave the issue to the Agriculture Ministry.
Annual profit up to RM12 million
An industry player, a non-bidder in the latest tender, told Malaysiakini that after the government raised the subsidy for padi seeds from RM500 to RM1,035 per tonne in 2009, the profit of padi seeds suppliers jumped to about RM600 per tonne.
"If the supplier is given annual quota of 20,000 tonnes, its profit alone will be about RM12 million annually," revealed the businessman who requested anonymity, saying he has business ties with the government.
According to him, the programme, initiated during the Abdullah Ahmad Badawi administration when the Agriculture Ministry was helmed now deputy prime ministerMuhyiddin Yassin, was to control the quality of padi seeds and ensure that farmers could buy the seeds at an affordable price.
Under the programme, the suppliers purchase padi from the farmers at RM1,400 per tonne, process them into seeds for planting and sell them back to the farmers, at the same price.
In return, for every tonne of padi seeds they supply, the suppliers are entitled to a subsidy RM1,035, a sum that was pushed up from RM500 a tonne when Noh Omar took over as agriculture minister.
The process of padi seeds production is monitored and inspected by the Agriculture Department to ensure quality.
The businessman disclosed that there were 17 companies vying for the contract but established bidders, including Padiberas Nasional Bhd (Bernas) and a company under the Muda Agricultural Development Authority (Mada), failed to make the cut.
"How could big companies like Bernas be rejected?" asked the bewildered businessman.
Biggest winners
Instead Mada has rented its processing plant to HMN, and the company confirmed to Malaysiakini that this breached a tender criterion that requires bidders to have their own padi seed plants.
The Finance Ministry's letter pointed out that a number of qualified bidders were rejected for reasons that were not stated in the tender criteria.
The businessman also questioned whether the annual quota of 20,000 tonnes of padi seeds was 'tailored' for both HMN and Seri Merbok, since all the other bidders were only given quotas below 10,000 tonnes.
Seri Merbok bagged two separate quotas, one for 20,000 tonnes and the other for 2,000 tonnes, making its total quota 22,000 tonnes - the highest among all suppliers.
"This is too much. Both of them have taken up more than half (52.5 percent) of the total annual quota of 80,000 tonnes.
"Why didn't the ministry distribute the quota more evenly to other qualified suppliers so everyone can have a fair share?" he asked.
This issue was first raised by Mahfuz ( right ) back in 2010 when he urged the Malaysian Anti-Corruption Commission (MACC) to investigate contracts awarded by the Agriculture Ministry to padi seed suppliers without the necessary facilities, such as HMN.
At that time, Mahfuz questioned the reason for awarding 16,000 tonnes of the supply quota to HMN while a major organisation such as Mada, which is capable of producing at least 15,000 tonnes, was only awarded 5,000 tonnes.
According to the Pokok Sena MP, Noh had then brushed off the allegation.
Noh defends awards
Yesterday, Noh Omar said that the supply of padi seeds through open tender this year was to ensure that only companies meeting the criteria were awarded the tender.
"However, it is surprising that when we introduced the open tender, which is more transparent, there were more protests," he told reporters after a 2013 budget seminar of the ministry at Putrajaya.
Previously, the tender for supply of padi seeds was carried out through direct negotiation and farmers complained of having received low quality seeds and the companies were found to have appointed third parties to supply the seeds, he said.
Under the open tender system, he said the tender was advertised in the newspapers and each application was evaluated by three committees of the ministry.
"Each application should fulfil the criteria of a padi seed supplier and have the approvals of the Finance Committee and Technical Committee before being shortlisted by the Procurement Board Master Committee," added Noh.
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