• 2016 Delimitation is a blatant attempt by the Election Commission to help UMNO win back control of the Selangor state government and win additional parliament seats in Selangor

    Press Statement by Dr. Ong Kian Ming, MP for Serdang, on the 21st of September 2016

    2016 Delimitation is a blatant attempt by the Election Commission to help UMNO win back control of the Selangor state government and win additional parliament seats in Selangor

    The 2016 delimitation exercise is a disgusting and partisan attempt by the Election Commission to gerrymander and malapportion parliament and state seats in Selangor in order to help the BN win back additional parliament and state seats.

    At the parliamentary level, the EC has redrawn the boundary lines by shifting pro-Pakatan state seats into pro-Pakatan parliament seats and by doing so, reduce the majority of marginal Pakatan parliament seats. For example, the N25 Kajang state seat has been moved from the P101 Hulu Langat parliament seat to the P102 Bangi parliament seat (the current Serdang parliament seat) resulting in the projected majority for Pakatan falling from 17267 in 2013 to 1046. In another example, the N37 Bukit Lanjan state seat has been moved from the P107 Sungai Buloh (the current Subang parliament seat) to P106 Damansara (the current Petaling Jaya Utara parliament seat) resulting in the projected majority for Pakatan falling from 26719 to 2013 to 3037. The N44 Sungai Pinang seat (renamed as N45 Bandar Baru Klang) has been moved from the P109 Kapar parliament seat to P110 Klang resulting in the projected majority for Pakatan falling from 23790 to 391. At the same time, the projected majorities for the super safe and super big (in terms voters) seats is expected to increase significantly – from 44672 to 73533 in P106 Damansara (the current PJU) and from 24685 to 49335 in P110 Klang. (See Table 1 below)

    Significant gerrymandering has also taken place at the state seat level. Many pro-opposition polling districts (daerah mengundi) have been shifted from marginal Pakatan seats into safe Pakatan seats in order to increase the chance for BN to win back some of the marginal seats. Based on the 2013 general election results, the BN would win back 7 state seats as a result of the 2016 delimitation exercise. These seats are N11 Ijok, N23 Dusun Tua, N43 Sementa, N44 Selat Klang, N46 Pelabuhan Klang, N51 Sijangkang and N53 Morib. At the same time, 6 state seats which were won by Pakatan win more than 54% of the popular vote in GE2013 have become marginal seats as a result of the delimitation exercise i.e. projected to win with less than 54% of the popular vote. These seats are N15 Taman Templer, N29 Seri Serdang, N33 Taman Medan, N38 Paya Jaras, N41 Batu Tiga and N49 Seri Andalas. Finally, 2 Pakatan state seats that were previously considered marginal are now even more marginal after the delimitation exercise namely N17 Gombak Setia and N18 Hulu Kelang (See Table 2 below).

    Selangor provides a clear example of how the Election Commission has abused its power and redrawn the boundary lines in order to benefit one side namely the Barisan Nasional. We must take all the necessary legal steps in order to ensure that this delimitation exercise is not approved.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

  • Disclose details of the new ERL concession agreement to assure the public

    Press Statement by Dr. Ong Kian Ming, MP for Serdang, on the 14th of September, 2016

    Disclose details of the new ERL concession agreement to assure the public[1]

    If you have taken a flight out of KLIA or KLIA 2 recently, did you know that you paid RM1 if you took a domestic flight and RM5 if you took an international flight to Express Rail Link (ERL) Sdn Bhd, the company which operates the high speed train from the airport to KL Sentral? These ERL charges, which started in 2002, have cost passengers a total of RM583.66 million, as of June 2015.

    Did you also know that under the existing concession agreement, the price of a one-way ticket from KL Sentral to KLIA would increase to RM97 in 2019 and RM126 in 2024? The fourfold increase in the initial starting price of RM31 in 1999 to RM126 in 2024 translates to an annual increase of 5.8% (at a compounded rate) which is far higher than the annual inflation rate of approximately 3%.

    Finally, would it surprise you that ERL Sdn Bhd sent a bill to the Federal Government for RM2.9 billion in 2015? for compensation because of deferred ticket price increases?

    These are some of the reasons which led the Auditor General to conclude that the government did not get the ‘best value for money’ for the lopsided concession agreement with ERL Sdn Bhd.

    Figure 1: The Auditor General concluding that the concession agreement did not represent the ‘best value for money’ for the government

    Almost all of the problems with the pricing of and compensation to ERL has to do with the fact that the concession agreement was negotiated in secret and without any scrutiny and transparency.[2] The concession holder can then negotiate for steep price increases in the ticket price knowing that the government won’t feel any public pressure when the concession is initially signed since this information won’t be disclosed publicly. The only reason why I was able to obtain the schedule for the ERL’s ticket price schedule from 1999 to 2027 was because it was disclosed in the Auditor General’s report! (See Figure 2 below)

    Figure 2: Ticket Schedule for the 30-year concession for ERL Sdn Bhd (from 1999 to 2029) for KLIA Express and KLIA Transit

    There may be little to no justification for the ticket price increases in the concession agreement e.g. what is an acceptable internal rate of return (IRR) for the concession holder, what KPIs they have to meet before the ticket price increases are approved, and so on.

    There is another dirty little secret involving concession agreements that was revealed in the AG’s report. The concession holder has a perverse incentive to inflate the projected number of passengers which leads to a higher projected revenue. This is because a higher projected revenue means the government has to pay a higher level of compensation to the concession holder in the event that government does not give approval for the concession to increase its ticket prices.

    Figure 3: Projected and Actual Revenue of the ERL, 2012 to 2014

    For example, according to Figure 3 above, ERL’s projected revenue in 2014 was RM905m while its actual revenue was only RM124.3m or 13.7% of the projected total. The concession holder will then use the shortfall between actual and projected revenue as the basis to ask for government compensation. This is the reason why ERL Sdn Bhd has an outstanding claim of RM2.9 billion on the federal government.

    The federal government has a unique opportunity to renegotiate the terms and conditions of the ERL concession agreement. The government paid for the entire construction cost of the ERL extension from KLIA to KLIA2 worth RM100 million. The KLIA extension to KLIA2, which started in May 2014, resulted in a 43% increase in ERL’s ridership from 6.44 million passengers in 2013 to 9.23 million passengers in 2014.

    Figure 4: Increase in the number of passengers from 2013 to 2014 after the opening of the KLIA extension to KLIA 2

    The AG’s report states that the government has, in principle, agreed to sign an extension to the ERL concession agreement for another 30 years which means the deal will expire only in 2059. This extension is supposed to be signed this month, September 2016. This is an excellent opportunity for the government to not only sign an extension which is fair and transparent but also presents the government an opportunity re-negotiate the existing agreement which is supposed to last until 2029. Indeed, what the government should do now is to re-negotiate for a new concession agreement given that the projected number of passengers should increase significantly as a result of the extension from KLIA to KLIA2. The new concession agreement must ensure that ticket price increases are reasonable and justified, that the methodology for projecting passenger and revenue growth is accurate and profits to the concessionaire must be capped at an agreed upon rate. The passenger service charge should be scrapped since not all outbound passengers use the ERL to get to the airport.

    To ensure the public that the government as well as the consumer / user is getting a fair deal out of this new concession agreement, I call upon the government to disclose the concession agreement by publishing it on a government website and also for the Minister in charge of re-negotiating the concession agreement to explain the new agreement in a press conference.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] All of the figures and charts showed in this statement is obtained from the Auditor General’s Report, 2015 Series 1, Activities of Ministries and Departments of the Federal Government

    [2] Similar to other concession agreements involving pricing and compensation such as toll concession agreements.

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