MyEG appointment not good for business

13 Jan 2015 / 05:38 H.

KUALA LUMPUR: The implementation of the mandatory online renewal of foreign workers work permits (PLKS) and the appointment of MY EG Services Bhd (MyEG) as the sole provider for the service is a bad precedence and against the Competition Act 2010, said The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
"The business community is extremely concerned that the government is setting up a bad precedence by compelling all employers into having to deal with a sole private entity on a mandatory basis, and having to pay exorbitant service charges, without the option of an alternative system," its secretary-general Datuk Low Kian Chuan pix told reporters at a press conference yesterday.
He said the Competition Act, which was enacted by the government, prohibits anti-competition agreements and the abuse of a dominant position in the market.
"The spirit of the Competition Act is to provide a level playing field for all players in the market. The current PLKS situation makes MyEG more than dominant, it is in fact a monopoly," he added.
ACCCIM also noted that other government electronic services provided by MyEG such as MyKad replacement, renewal of driving license and payment of summons, are not mandatory and over-the-counter options are still available to the public.
Low said most of the service charges imposed by MyEG on the government's electronic services are also priced at a nominal rate while the RM38 service charge per foreign worker for the renewal of the foreign workers permit is "extremely exorbitant".
"With the estimated number of 2.5 million legal foreign workers in Malaysia, MyEG would be collecting a total of RM95 million of service fees per year. This amount, on an annual basis, is far in excess of what is required to set up and operate an online system, even if it is to include collecting the database of foreign workers (which should already exist in the Ministry of Home Affairs' records given that each worker is individually approved by the authorities), or to undertake biometric verification," he said.
He added that the service charge for online renewal should be at a nominal rate to attract employers to use the online system.
The RM38 is on top of the RM125 processing fee per worker payable to the ministry for the renewal of foreign workers work permit. The processing fee was increased in October last year, from RM50 per worker previously.
According to Low, this adds on to the rising cost of labour due to the spike in costs arising from the imposition of several policies and regulations by the authorities such as the minimum wage policy, increase in foreign workers' levy and imposition of hospitalisation insurance.
Although business communities welcome the online renewal system, Low said it should not be made mandatory.
"The counter service and online service must co-exist together to provide employers with the requisite options depending on the circumstances of the applicants, as well as to have a backup system in the event one of the systems were to crash for whatever reasons, or when system upgrades necessitate a shutdown," he said.
ACCCIM has proposed for the re-opening of public counter service as an alternate option and a revision of the online service charge. It is expected to submit a memorandum of understanding to the ministry today.
MyEG's share price fell 2.62% to close at RM2.60 yesterday, with a total of 8.17 million shares traded.

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