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Puspakom, the entity which inspects vehicles for road-worthiness, has been granted a 15-year extension of its concession by the government.
That’s not all. The government has also agreed to revise the company’s rates and to award it another concession for the mandatory inspection of second-hand vehicles prior to transfer of ownership. The Edge business weekly has expressed concern about the 15-year extension. The paper said the government should have reviewed Puspakom’s track record in carrying out inspections since 1994 -and considered some of the bad press it has received - before granting the extension. The government will only review the company’s performance at five-year intervals. Puspakom made a net profit of RM18 million from turnover of RM76 million for its 2007 financial year. By the time the government reviews its performance in five years’ time, the company could have raked in a further RM90 million or so, The Edge noted. One of the main reasons for the concession extension is that the company had invested in 19 more inspection centres, largely in Sabah and Sarawak. “Awarding a money-spinning concession based on a company’s willingness to set up inspection centres in remote areas at a cost of RM3.1 million is not a move in the direction of good governance,” said the business weekly in its ‘Frankly Speaking’ column. Indeed. Contrary to widespread perception, Puspakom is not a government entity, but a monopoly business 100% owned by DRB Hicom. The major shareholders of DRB Hicom (as at 24 July 2007) are Etika Strategi Sdn Bhd (Syed Mokhtar Shah Syed Nor deemed to have an indirect interest) (15%), EPF (17%), and Khazanah (10%). The information about Puspakom being granted an additional concession to inspect second-hand vehicles is contained in DRB Hicom’s Annual Report for 2007. For the year ended 31 March 2007, Puspakom inspected 2.4 million vehicles. The additional concession would enable it to hit around 2.7 million inspections for the 2008 financial year. An instant increase in profits! Read More Here
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The Blogs 
And yes, it is a monopoly. In the first place, there should be a independent and third party study of Puspakom's performance to gauge whether their concession should warrant renewal. And if they are up to the mark, there should be an open tender system to ensure that we are getting the best value for our (yes, our) money.
Just because Puspakom promises to build additional inspection stations do not automatically qualify them for extension of the concession, let alone 15 years!