COMPANIES which bid for a RM1.4 billion contract to supply fertiliser to padi farmers are disappointed that they have been forced to give way to the National Farmers’ Organisation (Nafas).

They told The Malaysian Insight that the government’s decision to enter direct negotiations with Nafas was unfair as they had already spent money preparing their tenders.

One said the entire process now looks like a complete waste of time.

“If the plan was to give the project to Nafas, they should not have opened the tender process. For every tender that we put in, our cost can hit at least RM20,000.

“We need to discuss with the suppliers, attend the tender briefing in Sabah and Sarawak, need to provide fertiliser sample tests, do the necessary paperwork and much more,” said the businessman who did not want to be named.

The Agriculture and Agro-based Industry Ministry issued a tender offer from July 24 to August 29 for the supply of subsidised fertiliser to padi farmers for two to three years.

There were four open tenders under the main scheme.

Controversy, however, erupted when Minister Salahuddin Ayub wrote a letter of support to the prime minister, pitching for Nafas to be given the deal, overlooking the tender process.

Salahuddin’s reason was that it could help the welfare of smallholders in the agriculture industry, as well as help the 920,000 members of Nafas.

The minister said the government had cleaned up the mess in Nafas, which had been hampered by mismanagement and abuse of power under the previous Barisan Nasional administration.

However, for the private fertiliser suppliers, this should not have happened in the first place and that Nafas should have competed fairly in the tender process.

They also questioned the quality of the fertiliser supplied by Nafas, adding that in previous tender processes, others had outbid the farmers’ organisation because of their lower pricing.

“In all previous open tenders, Nafas did not win anything because its price was too high. Sometimes, the difference was about RM80 million.

“Even for the lime fertiliser (baja kapur), Nafas quoted a price higher by about RM10 million compared to others,” said another supplier.

These suppliers said Nafas is also unable to deliver the fertiliser as required by the ministry and is merely playing a middleman’s role.

Nafas will have to buy supplies from the other players as its factory in Gurun does not produce all the types of fertiliser required by the ministry.

“Take lime fertiliser, for example. Nafas does not produce this. It will re-tender for the supply of this fertiliser and will get it from one of us at a lower price. They are just going to make the profit for being the middleman.

“The profit margin which Nafas will give us is also too small, just about 5% only.

“So, what is the justification in allowing Nafas to monopolise the whole fertiliser supply contract? And we have not spoken yet about Nafas’ technical capabilities and the quality of its products.”

Salahuddin said the open tender process has not been finalised and that no company has been awarded the contract yet.

Another fallout from this debacle is the transfer of the ministry’s secretary-general to the Public Service Department for allegedly “sabotaging” the minister in the fertiliser contract issue. – November 28, 2019.