Costs soar after health services privatised

By Anil Netto,

Ever since health care support services in general hospitals were privatised, costs have soared.
In 1996, health care support services were privatised to three companies: Faber Medi-Serve Sdn Bhd (FMS), Radicare (M) Sdn Bhd and Pantai Medivest Sdn Bhd.
In 1997, the payments made to these companies added up to RM340 million, broken down as follows:

• Faber RM127m
• Radicare RM150m
• Pantai Medivest RM63m

In 2009, costs rocketed to over RM1.0 billion, made up as follows:

• Faber RM452m
• Radicare RM377m
• Pantai RM214m

For the 13 years from 1997 to 2009, the three companies were paid a total of RM8.7 billion, broken down as follows:

• Faber RM4.0b
• Radicare RM3.2b
• Pantai Rm1.5b

The above information was provided by Health Minister Liow Tiong Lai in response to an oral question in Parliament on 8 April 2010 by Dr Lee Boon Chye.  The MP for Gopeng had wanted to know how much was paid to these concessionaires .
Now, let’s look at Faber Medi-Serve (FMS) more closely.
In June 1995, the government decided to award the company a 15-year concession (hey, that means the concession ends this year!) “to manage, operate and provide five core support services to 71 out of the 123 MOH-owned hospitals”.
FMS’ business centres on clinical waste management, building and facility engineering management, linen and laundry, biomedical engineering, and cleansing and janitorial services.
FMS currently provides such support services to 75 public hospitals in Perlis, Kedah, Penang, Perak, Sarawak and Sabah. The firm is a subsidiary of Faber Group Berhad and a member of the UEM Group of Companies.
The substantial shareholders of Faber Group Berhad as at 31 March 2010 are as follows:

• UEM Group Berhad 34.29% (direct)
• Khazanah Nasional Berhad 34.29% (indirect)#
• Universal Trustee (Malaysia) Berhad 23.42% (direct) (who is behind this?)

# Deemed interest by virtue of its substantial interest in UEM Group Berhad
According to its Annual Report 2009, Faber Group Berhad actually has a 43 per cent ownership interest and voting power in FMS. (Who owns the rest of FMS?)
For the year ending 31 December 2009, Faber Group Berhad posted a profit before tax of RM141 million on the back of turnover of RM805 million.