Malaysia’s Mahathir Faces Backlash Over Race Quota For Contractors On China-Backed East Coast Rail Link

Prime minister has confirmed preferential treatment for so-called Bumiputra companies will also apply to hiring for multibillion-dollar construction project

But detractors say affirmative action risks compromising on quality and policy rubbishes election promises of full equality

Prime Minister Mahathir Mohamad’s assurance of preferential treatment for Malay and other indigenous businesspeople when awarding contracts for the multibillion-dollar China-backed East Coast Rail Link has been sharply criticised by political analysts and the opposition for deviating from his administration’s pledge to enhance multiracialism.

His government said it would continue affirmative action for Bumiputra companies – a term referring to the Southeast Asian nation’s Malay and other indigenous groups, which make up about 70 per cent of the population. However, a quota has yet to be set.

Mahathir, whose Pakatan Harapan government last year ousted former Malay-dominated coalition Barisan Nasional after 61 years of uninterrupted rule, made the announcement on Tuesday after appeals from industry groups such as the Malaysian Bumiputra Contractors Association, which said at least 42,000 Bumiputra professionals had the skills to take on the civil works project.

“The prime minister is playing the race card yet again,” said Ti Lian Ker, vice-president of opposition party the Malaysian Chinese Association (MCA). “Mahathir’s coalition is aware it has to pull in the Malay vote. The Malays who voted against Barisan Nasional last May are now no longer attracted to Pakatan Harapan.”

The prime minister’s alliance won the 2018 polls with only 30 per cent of the Malay vote. The remaining ballots mostly went to Malay opposition parties. Some 95 per cent of the country’s voters of Chinese descent were reported to have backed Pakatan Harapan.

Malaysia has long practised affirmative action for its Bumiputra demographic, who have enjoyed preferential access to educational scholarships, housing discounts and job opportunities. Put in place to correct income inequalities between the Bumiputra and other Malaysians such as ethnic Chinese and Indians, detractors say the policies have bred resentment and stifled competitiveness.

Confirmation of a Bumiputra quota for the rail link comes weeks after the government announced a new economic model with the slogan Shared Prosperity, which promises to minimise socio-economic inequalities through inclusiveness. Opposition politicians responded by accusing the government of pandering to Malay voters.

A Bumiputra quota for mega projects such as the rail line could result in more so-called Ali Baba contracts being signed in which Bumiputra contractors are used as a front for non-Bumiputra firms, Ti said.

“Don’t be surprised if a larger quota is given to the Bumiputras. The government has to be careful not to lose money just because of politics.”

The opposition politician said the situation was reminiscent of a debate surrounding the Bumiputra quota for public university admissions, which is set at 90:10.

Ti’s view was echoed by MCA Youth member Alex Fong, who asked what had happened to promises of “full equality” pushed by Pakatan Harapan component the Democratic Action Party (DAP).

“Do they agree that this is the reality and a must-policy for now to ensure the stability of the country? If so, then admit it. If not, then please withdraw from cabinet,” Fong said.

The MCA, which previously held several cabinet roles before the party was decimated in the 2018 elections and reduced to just one parliamentary seat, has consistently accused long-time foes the multiracial DAP of “selling out” the MCA’s predominantly Chinese support base. The DAP has largely ignored those claims, maintaining it is a party for all Malaysians.

Mahathir’s administration has been grappling with the tricky racial politics of multi-ethnic Malaysia since winning the elections on pledges of diversity, equality and a more manageable cost of living.

Concerns about race relations and the preservation of Malay rights came second to worries about the economy in a recent survey of voters by the Merdeka Centre think tank.

Former top civil servant Sheriff Kassim, however, believes the railway announcement was “part of the concept of Shared Prosperity”.

“I believe the project management will require these Bumiputra contractors to compete among themselves for the work tenders,” the former Treasury secretary-general said.

The Shared Prosperity philosophy launched earlier this month was widely lauded by economists, activists and lawmakers, who said it would usher in a new era of fair and inclusive equitable growth. However, critics have since said no proper debate on existing Bumiputra policies has ensued, so the new model ran the risk of becoming a mere slogan.

“It doesn’t have any concrete policy recommendations, especially on controversial issues such as Bumiputra policies,” said top political economist Terence Gomez, who urged the government to ensure high-quality work would be carried out for the rail line.

“History has indicated that when you do give contracts along racial lines, the chances of high-quality projects dip. So for major projects like the [railway], we have to think these things through carefully. There is a need to include local contractors in the construction, but it should be done on merit.”

But Malaysian Bumiputra Contractors Association chairman Mokhtar Samad insisted he was “fully confident” top-quality work would be delivered.

“Many of these Bumiputra contractors were involved in building the MRT [Mass Rapid Transit] and LRT [Light Rail Transit]. We would like to extend our thanks to the prime minister for ensuring we can all be equally involved in successful mega projects,” he said.

The Beijing-backed East Coast Rail Link has been one of the most controversial infrastructure projects in Malaysian history. Mahathir suspended work after coming to power last May, citing high costs and empty state coffers. After months of speculation and negotiations, Chinese contractor China Communication Construction Company agreed to reduce costs by US$5.2 billion and bear some of the risks involved in maintaining and operating the line after it opens in 2026.

The firm also agreed to boost the proportion of staff made up of locals from 30 per cent to 40 per cent for civil works.

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