Help bumiputera companies more, Petronas urged

National oil company Petronas is still failing in its mandate to help bumiputera companies, which receive only five percent of its expenditure budget, the Malay Economic Action Council (MTEM) said today.

MTEM, which consists of 42 Malay business groups, said of the RM200 billion total Petronas expenditure budget, only RM10 billion were received by bumiputera businesses and mostly under its vendor development programme (VDP).

MTEM said many major Petronas jobs, such as its billion ringgit upstream oil and gas drilling activities and plant engineering, design and construction contracts, were still reserved for foreign companies.

"The involvement of Malay and bumiputera vendors performing work for Petronas should be doubled in order to be able to achieve empowerment of the bumiputera agenda and Vision 2020, which is the dream of the past and present leaders of the country," MTEM said in a press statement.

It called on Petronas to strive to allocate at least half, or RM100 billion of its yearly expenditure to bumiputera companies.

Demands being made since February

It also wants Petronas to double the VDP programme time-frame from five to 10 years, so that the bumiputera companies will have a better chance to grow and succeed.

"This is to give a company the opportunity to implement effective, comprehensive business modules, including investment, development and training," MTEM said.

It noted that out of 77 companies that were under its VDP programme, only 11 have survived.

MTEM has been making the same demands on Petronas since February this year, even calling for Petronas president and chief executive officer Shamsul Azhar Abbas to take the responsibility for the failure and to step down.

In response, Petronas has often reiterated that it has not neglected Malay businesses at all.

 In a Sinar Harian report today, a Petronas officer said that the company was strict with its VDP handouts as it wanted to discipline bumiputera businesses and prepare them to compete.

The officer said Petronas often could not give local companies the bigger jobs as they were not qualified and lacked the experience.

The company said that bumiputera companies already get at least 70 percent of its VDP business and that Petronas has spent RM7.5 billion since the programme began.

For petrol retail stations for example, Petronas revealed that it gave out total contracts worth RM242 billion between 1980 and 2012. Out of these, some 61 percent were given to bumiputera-owned companies.