New procurement law aims to end Malaysia’s ‘Ali Baba’ contract culture

New procurement law aims to end Malaysia’s ‘Ali Baba’ contract culture



Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim tables the Government Procurement Bill 2025 in the Dewan Rakyat at the Parliament Building in Kuala Lumpur on August 27, 2025. — Bernama pic

Thursday, 28 Aug 2025 9:23 AM MYT


KUALA LUMPUR, Aug 28 — The Government Procurement Bill 2025 will bring Malaysia closer to international standards in public procurement, including principles of transparency, open competition, fair treatment, and integrity as outlined in the UNCITRAL Model Law on Public Procurement 2011.

Tan Hong Pin (PH-Bakri) said the bill stipulates that the main method for government procurement must be through open and fair competition as stated in Section 28, thereby bringing Malaysia closer to global standards.


“Malaysians still remember controversial projects that were awarded through direct negotiations without an open process.

“The Auditor-General’s Report, year after year, also reveals problematic projects such as schools, hospitals, and roads that were delayed due to unqualified contractors, fake documents, political interference, and the ‘Ali Baba’ culture that compromises work quality,” he said while debating the bill during its second reading in the Dewan Rakyat yesterday.


Tan said the bill also introduces new control mechanisms, including mandatory open tenders, the establishment of a Procurement Appeal Tribunal, and harsher penalties.



Among them are fines of at least three times the contract value or not less than RM1 million, and imprisonment of up to five years for offences involving fraud or document falsification.

“Administrative penalties are also introduced, including daily fines of up to RM500 for continuous violations… The message is clear that the government procurement system is no longer a space to be manipulated but an integrity-based process that carries high risks for those who try to abuse it,” he said.


According to Tan, the bill also introduces new elements aligned with international best practices, such as encouraging the participation of small and medium enterprises (SMEs), the use of local products, and the implementation of green procurement. This also demonstrates the MADANI Government’s commitment to upholding integrity since taking office in 2022.

There were also suggestions from MPs for public-private partnership (PPP) projects to be included under the bill.

Yeo Bee Yin (PH-Puchong) asked for clarification from the government regarding the MEX 2 Highway Project, which has been delayed for six years although it raised RM1.3 billion through bonds.

“The Malaysian Anti-Corruption Commission (MACC) previously investigated allegations of false claims amounting to RM416 million, with several individuals arrested.

“It was also reported that RM560 million is needed to complete just 11 per cent of this project,” she said.

Meanwhile, Datuk Mas Ermieyati Samsudin (PN-Masjid Tanah), in her debate, requested that the bill be referred to the Parliamentary Special Select Committee on Finance and Economy for further discussion and engagement sessions.

Earlier, Prime Minister Datuk Seri Anwar Ibrahim tabled the bill for its second reading in the Dewan Rakyat.

The bill aims to provide for obligations, responsibilities, governance, and transparency in government procurement, including the establishment of the Government Procurement Appeal Tribunal and other related provisions.

The Dewan Rakyat sitting will continue today. — Bernama