DAP: Sarawak’s RM1 billion ICT plan may benefit only one firm

Chong-Chieng-Jen-towerKUCHING: The Sarawak government’s announcement that it will spend RM1 billion to upgrade ICT infrastructure and to build another 5,000 communication towers has elements of “rent-seeking” as only one firm has the authority to construct them, says the DAP.

State DAP leader Chong Chieng Jen said the development plan, which will increase the number of towers from the current 1,200 statewide to 5,000, is a “direct award of a mega project to BN cronies without tender”.

On Monday, Sarawak Chief Minister Abang Johari announced a plan to build an extra 3,800 towers, as well as cloud servers, as part of a statewide ICT infrastructure upgrade plan.

Currently, one firm – Sacofa Sdn Bhd – has the authority on the construction and licensing of ICT communication towers.

“The development of ICT infrastructure can be carried out without the rent-seeking and profiteering elements involving Sacofa Sdn Bhd.

“Yet the state government chose to allow Sacofa to profit on this RM1 billion allocation. This will result in higher costs and less effective results,” Chong said in a statement released yesterday.

After Sacofa was set up in 2001, it was incorporated as a regulatory body, fully-owned and controlled by the Sarawak government.

Sarawak’s state law was amended to give Sacofa the authority to regulate and control ICT infrastructures.

Subsequently, Sacofa involved itself in the building of communication towers, and then the construction of other ICT facilities, such as the laying of fibre optic cable networks.

“The state government even took up a massive loan to build up the business of Sacofa. In 2015, the state government sold a 50% stake in Sacofa to CMS Group at way below the fair price of the company, with the transaction completed in 2016,” Chong said.

Chong charged that the chronology of events leading up to the ICT plan announcement is “just so coincidental that it strongly suggests that all was planned to allow CMS Group get the biggest cut from the award of the RM1 billion project”.

“First, the state government sets up a company to regulate and control ICT infrastructure in Sarawak. Secondly, with that control, the company ventured into commercial activities on state government’s financial backing.”

“Thirdly, when the company built up its business base, the state government sold the company cheaply to CMS Group. Fourthly, the state government awards RM1 billion worth of contracts for Sacofa to have full control over,” Chong said.

Chong insisted that DAP “fully supports” the development of ICT infrastructure in Sarawak.

“However, we object to the way the state BN government goes about doing the said development because the government is giving a private company the power to regulate and have monopolistic rights over the development of ICT infrastructure.

“With such regulatory and commercial rights in one company, the state is effectively giving Sacofa a blank cheque of RM1 billion to do as it likes or to build 5,000 telco towers as and when it decides,” Chong said.

“This entails higher costs to the government and ultimately higher costs to the people of Sarawak,” he said.

In response to the statement by the Sarawak DAP chairman, Sacofa said it was looking into the matter.

“The senior management is looking at the statement. We will comment later on that.

“For now, the (construction) awards have yet to be made,” Sacofa corporate affairs manager Mohamad Sait told FMT.

Meanwhile, the chief minister’s office did not respond to a request for comment.

Abang Johari told reporters here yesterday, after the closing of the International ICT Infrastructure and Digital Economy Conference (Idecs) Sarawak 2017, that the state government plans to start the ICT infrastructure upgrade project by the end of this year.

The ICT plan is expected to be funded, at least partially, by the newly-created Development Bank of Sarawak (DBOS).