KUALA LUMPUR: The government's move to provide hundreds of millions in subsidy to Mydin Mohamed Holdings Bhd to open up Kedai Rakyat 1Malaysia (KR1M) in Sabah and Sarawak next year will force Malaysians to keep guessing whether they are getting value for their money.

Petaling Jaya Utara MP Tony Pua said Mydin's monopoly of the KR1M facility has essentially killed off healthy competition in the retail sector.

"The RM386 million subsidy is given only to Mydin, killing off competition. Mydin will have the monopoly to sell certain products at substantially cheaper price than its competitors due to exclusive subsidies from the government.

"Why is the government giving special privilege to Mydin?

"What's worse, there is no transparency in the subsidies provided to Mydin. Malaysians are now in the dark on whether they are getting the value for their money or whether a significant chunk of the subsidy will be siphoned by the company instead of being passed on to consumers," he said at a Press conference at the Parliament lobby yesterday.

Pua also questioned why next year's allocation to set up KR1M outlets in Sabah and Sarawak was so much higher than this year.

"Based on the 57 proposed new outlets in Sabah and Sarawak with a budget of RM386 million, each retail shop will average a whopping cost of RM6.77 million.

"This is so much higher than what was announced in the 2012 Budget where only 40 million was allocated to set up 85 such stores, where each store will average RM471,000.

"Why is there a difference of RM6.3 million for each store set up between 2012 and 2013, especially since the government claims the inflation rate is only 1.9 per cent?"

- The Malay Mail