There are 50,000 security guards stationed at the country’s 12,000 schools. — Picture by Sayuti Zainudin

KUALA LUMPUR, Oct 20 — Government agencies and ministries’ failure to pay over RM300 million to around 600 security firms in the last six months has caused the shuttering of some companies that supply security guards, an industry group has said.

Security Services of Association president Datuk Seri Mustapa Ali reportedly said the non-payment to the security firms was a “long-standing issue and one that really burdened the companies, forcing 30 per cent of them to close down”.

“Our member companies employ 300,000 security personnel.

“When they don’t receive their payments, the companies still have to pay their workers and make EPF and Socso payments.

“They also have to service their respective bank loans, including mounting interest payments,” he was quoted as saying by local daily The Star.

Mustapa said the group originally wanted to organise a strike for security guards over the delayed payments, but said it has decided not to hold such a protest.

“However, as some of the ministries have settled the overdue payments, we are not going to protest.

“If things are not settled within the next few days, then we will decide on further action,” he said.

In a separate report by local daily New Straits Times, Mustapa said many security firms had to “fork out their own savings” and with some even taking up loans in order to pay their employees amid the delayed payment.

NST reported Mustapa as saying the government should not use Treasury Instruction 58 which allows ministries to defer payment, urging government agencies and ministries settle their bills within 14 days of receiving invoices for security services just like other industries to avoid “glitches” in security firms’ operations.

Mustapa said the association wants a review of the allegedly lopsided contracts between the country’s 800 security firms and the Home Ministry, which he said had resulted in unreasonable expenses for the companies which were caused by the overdue payments, NST reported.

He reportedly made his remarks after the security firms met with government representatives from the Home Ministry, Finance Ministry, Education Ministry, the Royal Customs Department and the Employees Provident Fund, among others.

Noting that there are 50,000 security guards stationed at the country’s 12,000 schools, NST also reported that Education Ministry representatives had said the ministry would settle a backlog of payments due up to this November by tomorrow.

The Star quoted Mustapa as saying that the association will meet with the Attorney General’s Chambers soon to renegotiate contracts.