Stop letting private firms hold public funds, say anti-graft groups

Anti-graft watchdogs have urged Putrajaya to stop allowing private intermediaries to hold public funds when facilitating government collections, following the revelation that Zetrix AI Bhd owes RM314 million in arrears.

Transparency International Malaysia (TI-M) said future concession agreements for fee collections must include strict contractual safeguards to prevent major revenue defaults.

TI-M president Raymon Ram suggested that revenue collections be paid directly into the government’s accounts, with vendors paid separately by the relevant agency.

“The starting principle should be simple. A private service provider may facilitate the collection of government revenue, but it should never accumulate or exercise discretionary control over large amounts of public money,” he told FMT.

“Contracts should contain predetermined suspension triggers so that a vendor cannot continue accumulating public revenue while repeated notices are being issued,” Raymon said, adding that future concession contracts should have strict enforcement mechanisms.

MYEG subsidiary Zetrix AI Bhd has racked up RM314 million in unremitted road tax fees and traffic summonses collected on behalf of the road transport department (JPJ) since May.

JPJ suspended the company’s collection services on Oct 5, after issuing 35 notices and holding four engagement sessions, which ultimately prompted Zetrix AI to submit a settlement proposal to Putrajaya.

Transport minister Loke Siew Fook also revealed that the company, formerly known as MyEG Services Bhd, had submitted a cheque worth RM231 million, but the bank later advised it was instructed by Zetrix not to process the payment.

Raymon criticised the five-month delay in taking decisive action against Zetrix, arguing that merely issuing repeated notices while arrears continued to mount was an ineffective control mechanism.

“Thirty-five reminders cannot be regarded as an adequate control mechanism when hundreds of millions of ringgit in public revenue are involved,” Raymon said.

He urged Putrajaya to launch an independent forensic audit to establish a clear chronology of events dating back to the first missed remittance.

“Accountability must also follow the decision-making chain and should not stop at junior officers, if senior officials knew of the accumulating exposure and had the authority to intervene.”

Center to Combat Corruption and Cronyism (C4 Center) senior research officer Bryan Cheah cautioned against placing immediate blame on ministry personnel, citing the repeated notices and bounced cheque.

Cheah however said the authorities should probe if there were elements of corruption behind the unremitted funds.

“C4 Center invites the government to reassess current procurement policies to ensure contracts and concessions given to private sector players adhere to a strict code of conduct that would include a set protocol for actions to be taken should non-compliance with contract terms occur.”

The core objective of sound public administration is preventive oversight, he said, pointing out that punitive measures only act after the fact.

“By nature, penalties are responses in situations where a breach or violation of terms has occurred. The purpose of good governance is to ensure such occurrences do not take place to begin with.”

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