The Sabah government is open to awarding future contracts to KOSAN, but only if the state-backed cooperative revamps its operations and proves it can meet quality standards, said Youth and Sports Minister Datuk Ellron Angin. 

Ellron confirmed that KOSAN’s contract to supply school uniforms and shoes was officially terminated on September 19, 2024, following its failure to collaborate with a qualified company as required by  the government.

“We are still giving a chance to KOSAN. KOSAN needs to be revamped. If they can prove that they are capable of fulfilling contracts like before, then we will consider giving them another opportunity,” he told reporters after attending the cabinet meeting in Kota Kinabalu on Wednesday. 

He said the cooperative had initially proposed to partner with a capable firm in March 2024 as part of a new two-year contract, but by July the same year there had been no progress. 

Ellron said they had proposed to work with public listed company Kim Teck Cheong but no cooperation was established by August 30 deadline last year. 

“Because of that, the government had no choice but to terminate the contract,” he said.

KOSAN later ceased operations at its main office and factories in Tuaran and Papar, affecting 230 workers.

“We sympathise with the workers. That’s why we’re still discussing whether KOSAN should be given a second chance,” he said. 

He said the government expects improvements in product quality if the cooperative wishes to return as a supplier.

“There were a lot of complaints from parents – the shoes were not comfortable, the clothes were not suitable, too hot,” he said.

“With the number of students involved – 287 across Sabah – we need to make the best decision.”

Ellron clarified that the government only monitors whether contractors meet obligations under the agreement.

“As long as KOSAN can fulfil their contract with the government, there’s no problem. But if they fail to fulfil it, then that becomes an issue.”

He added that the current supply contract will expire by the end of this year, and any future appointment will be subject to open tender.

“KOSAN can still participate in the tender process. But the company must show it is capable of handling the responsibility.”

He said the Cabinet decision reflects the government’s hope that the cooperative can bounce back.

“KOSAN must be revamped so that the company can carry out its duties and responsibilities as a uniform supplier.” 

KOSAN shut down its garment and shoe factories in Tuaran and Papar in October 2024 following the termination of its state contract, leaving 230 workers jobless without compensation. – March 26, 2025