• Concession Agreement for the Kepong Incinerator project must be publicly disclosed

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 10th of February, 2017

    Concession Agreement for the Kepong Incinerator project must be publicly disclosed

    It was reported in the Edge Weekly (January 30 to February 5, 2017) that three companies have been shortlisted for the controversial 1000 ton per day solid waste incinerator in Taman Beringin, Kepong. These three companies are Malaysia Resources Corp Bhd (MRCB) in partnership with South Korea’s Hyundai Rotem Co, Cenviro Sbd Bhd (formerly UEM Environment Sdn Bhd) in partnership with Japan’s Mitsubishi Heavy Industries Ltd and DRB-Hicom in partnership with Malakoff Corp Bhd and Japan’s Sumitomo Corp. It was also reported that the concession agreement to build and operate this incinerator will be awarded in March, 2017.

    Concession agreements in Malaysia, from lopsided toll contracts to the Express Rail Link (ERL) contract that allowed for unreasonable price hikes, have almost always favoured the concession holders at the expense of the consumer / user. The nature of many of these lopsided contracts were only discovered after they were signed, usually when the government has had to explain why they had to allow these concession holders to increase the price of tolls or train tickets by large and unreasonable increments.

    This incinerator will be the largest incinerator of any kind in Malaysia. Recall that much smaller scale incinerator projects in Pulau Pangkor, Pulau Langkawi and Cameron Highlands have failed in the past, at great cost to the federal government. The nature by which these contracts were awarded to the company, XCN Technology, was called into question by the Auditor General. If the Kepong Incinerator project fails, the cost to the taxpayer will be far greater than the smaller scale failures in the abovementioned locations. Recall also that this is the second time that the Kepong incinerator project has been tendered out because there was only one company that made a final submission in the first round of tenders.

    In order to avoid the mistakes of the past, I call upon the Minister in charge of the Economic Planning Unit (EPU), Datuk Abdul Rahman Dahlan, to disclose the details of the Kepong incinerator concession agreement including the projected cost of the project, the tipping fee that will be charged to DBKL, the conditions of the waste guarantee to the company, the length of the concession period, the performance indicators and the terms by which the government can take over the project if it fails to deliver.

    In addition, the Minister must convince the raykat the need for the Kepong incinerator given that KL has started the separation of municipal waste which should decrease the overall amount of waste that needs to be disposed.

    Failure to do so will only invite more protests from the residents and the high probability that the taxpayer and the ratepayers in KL will end up footing the bill for another lopsided concession agreement.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

  • President Trump’s Muslim Ban must be strongly condemned including by Prime Minister Najib

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 29th of January 2017

    President Trump’s Muslim Ban must be strongly condemned including by Prime Minister Najib

    President Donald Trump’s executive order, signed yesterday, to stop Syrian refugees from entering the United States and to stop non-US citizens from seven predominantly Muslim countries – Libya, Iran, Iraq, Somalia, Sudan, Syria and Yemen – from entering the United States, must be strongly condemned.

    It is an inhumane action especially for those Syrian refugees who already have been granted approval to travel to and seek asylum in the United States.

    It is an unjustified action that affects thousands of students and employees who are studying and working legally in the United States.

    It is hugely disturbing action that points to further steps that may be taken by Trump including making it harder for citizens from other predominantly Muslim countries such as Malaysia, to travel to, study in and work in the United States.

    Ironically, Trump’s executive action affects citizens from these seven countries that have been invited by the United States government to visit or study or do research in the US via US state department programs such as the International Visitors Program (IVP) and the Fulbright Scholarship / Fellowship Program, just to name a few. As a former recipient of the Fulbright scholarship to the US, where I completed my PhD in political science at Duke University, I strongly condemn this action by Trump as it stands against the principles of non-discrimination and openness represented by the United States.

    Many world leaders have already criticized this executive action by President Trump.[1] Prime Minister Najib, on the 21st of January, 2017 sent out a congratulatory message to Trump on his inauguration as the 45th President of the United States. Will PM Najib also send a message to Trump to condemn this executive action that affects the citizens of these Muslim majority countries?

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.aljazeera.com/news/2017/01/world-leaders-condemn-donald-trump-muslim-ban-170128134635041.html

  • PTPTN deficits is a ticking time bomb that needs to be addressed before it explodes

    Media Statement by Dr. Ong Kian Ming, General Manager of Penang Institute in KL, on the 21st of December 2016

    Note: Some newspaper reports on my statements during a PTPTN forum on Monday, 19th of September have been misreported. The recommendation to revise the 1st class waivers for PTPTN loans only applies to students from middle and upper income families. As it clearly states in the full report, 1st class waivers for PTPTN loans for students from low income families should be maintained. In addition, there were many other recommendations that were proposed in the Penang Institute report such as putting in an income threshold of RM3500 per month before one has to repay his or her PTPTN loan that was not covered in many of the newspaper reports)

    PTPTN deficits is a ticking time bomb that needs to be addressed before it explodes

    Between 1997 and 2015, 2,464,937 loans with a value of approximately RM55.83 billion were approved for students pursuing their higher education studies in Malaysia. While it is undeniable that PTPTN has been an important factor in increasing access to higher education for many Malaysians, the financial hole which PTPTN finds itself in is very serious and will become even more serious moving forward.

    According to the PTPTN Annual Reports from 2011 to 2015, the agency had been making profits from 2011 to 2015 (RM18m, RM12m, RM21m, RM109 and RM401m in 2011, 2012, 2013, 2014 and 2015 respectively). Though seemingly encouraging, these positive profits mask serious underlying financial problems. In reality, PTPTN was only able make these profits due to substantial annual government grants, totalling RM6.456 billion from 2011 to 2015. Without the injection of financial support from the government, PTPTN would have suffered losses totalling RM5.894 billion from 2011 to 2015. (See Table 1 and Figure 1 below)

    The amount of government grants has almost doubled from RM915 million in 2011 to RM1.715 billion in 2015, mostly to cover the growing interest payments which PTPTN has to pay out to banks and the EPF for the money it has borrowed from them. To give a picture, interest servicing costs as a percentage of total expenses reached a high of 81.5% in 2011 before coming down to 75.5% in 2015. Interest servicing costs reached a high of RM1.519 billion in 2015 (Figure 2 below).

    Penang Institute is proposing 9 recommendations to address the financial problems faced by PTPTN.

    (i)               Conduct a comprehensive survey of PTPTN loan holders to accurately identify the reasons for the low repayment rate

    This survey, which would be carried out by an independent survey firm, would collect data on the financial patterns of fresh graduates, such as the distribution of starting salaries, the type of jobs held vis-à-vis qualifications, other loan obligations besides PTPTN, daily and monthly expenses such as rent and other types of expenditure. The 2015 survey commissioned by PTPTN involved a very small sample of 200 respondents and did not include crucial information such as starting salary, type of course and the type of the IPTA or IPTS.

    With more concrete data, PTPTN would be better-placed to introduce new policies such as income contingent loan repayments, variable interest rates and means tested loans (see below). Going a step further, the Ministry of Higher Education would be able to evaluate important trends such as completion rates in individual colleges and universities, as well as starting salaries of fresh graduates by course and individual colleges and universities. Overall, this would help in better planning for the higher education needs of the country moving forward.

    (ii)              Loan repayments should be contingent upon income

    To ensure that low income earners are not excessively burdened by PTPTN loan repayments, graduates should have the option of repaying their PTPTN loans only if their monthly income exceeds a minimum amount, at say RM3500.[1] On top of this, monthly payment instalments could be capped at a percentage of borrower’s income, say 10%. (Those who earn below this income threshold but who want to start repaying their loans should be allowed to do so).

    (iii)            Removing / Reducing Interest Rate Subsidies

    Currently, PTPTN charges a 1% annual interest rate on its loans under the Ujrah repayment scheme. This is far below the 4% interest rate on government housing loans borne by civil servants. The interest rate subsidy on PTPTN loans should be reduced or removed completely. Coupled with the income contingent payment, this would make PTPTN loan repayments more equitable as even if the loan holder is charged a higher interest rate, he or she would only need to start repaying once above a certain threshold income. Such policies are already in practice in the UK, where student loan holders are charged differential interest depending on income level.

    (iv)            Automatic deduction of PTPTN loan repayments

    In order to increase loan repayment rates, repayment should be automatically deducted from the salaries of those graduates who are already eligible to service their loans.  This mechanism is already in place for EPF and SOCSO contributions. It is also a common practice in countries like Australia where automatic deduction amounts are adjusted according to the amount of salary earned.

    (v)              Means testing PTPTN loans

    Currently, the amount of money that an individual can borrow from PTPTN is contingent on his or her family income. For example, a student from a family with household income exceeding RM800 a month would be able to borrow up to 50% of the maximum loan amount. But this is still not proper means testing. Students with parents earning over RM20,000 a month, for example, would still be eligible for a PTPTN loan. PTPTN loans should be properly means tested so that those above a certain monthly income threshold e.g. RM10,000 should not be eligible to take out a loan.

    (vi)            Reducing / Removing 1st class honours waivers and discounts for PTPTN loans

    1st class honours waivers have cost PTPTN over RM600 million since its inception, while the 10% / 20% discounts on early loan repayment have incurred a further RM300 million. The loan discount is a problematic policy since it benefits the well-off who have the financial ability either to pay off their children’s loans in one shot (20%) or regularly service their loans (10%). The 1st class honours waiver is also problematic since students from middle and high income families are disproportionately represented among 1st class honours holders. To increase its effectiveness, these policies should be revised. For example, the 1st class honours waiver should only be applicable to students from low-income families.

    (vii)           Increasing the maximum loan period

    Current PTPTN policy dictates that a loan must be repaid within 5 to 15 years. Extending the length of the loan period beyond 15 years would allow struggling loan holders to reduce their monthly repayment obligations and so ease their financial burdens.

    (viii)          Shifting some of the loan burden to the private sector

    Rather than relying totally on PTPTN to provide student loans, the government should shift part of the burden to the private sector. On its part, the government can provide loan guarantees similar to the My First Home financing scheme for first time homebuyers, whereby 10% of the total loan amount is guaranteed by CAGAMAS.[2]

    (ix)             Consider a larger reform of the higher education sector

    While the paper has focused directly on PTPTN, the government’s strategic plans concerning higher education also have a significant impact on the agency’s financial position. For example, the government envisions a rapid expansion in the number of students in IPTS but it has given little thought as to how these students will fund themselves, and the likely impact of this increase on demand for PTPTN loans. An attempt to address PTPTN’s underlying problems should incorporate a fundamental review of the current Higher Education Blueprint, including re-examining the balance between IPTA and IPTS students, their respective funding models and assessing the quality of these higher education institutions.

    Will these measures be sufficient to address PTPTN’s woes? One cannot say for sure but if nothing is done, then PTPTN’s balance sheet will continue to be a ticking time bomb that is just waiting to explode.

    Dr. Ong Kian Ming
    General Manager of
    Penang Institute in KL

    (The full report and presentation are available on the website of Penang Institute.)

    [1] http://penangmonthly.com/tag/ptptn/

    [2] http://www.srp.com.my/docs/html/faq.html

  • The Election Commission must disclose which groups are responsible for registering a record 500k voters in the 2016 Third Quarter electoral roll update

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 9th of December, 2016

    The Election Commission must disclose which groups are responsible for registering a record 500k voters in the 2016 Third Quarter electoral roll update

    In the recently released Quarter 3, 2016 electoral roll update, an astounding 501,799 newly registered voters was added to the electoral roll. This is more than 5 times the number of newly registered voters in Quarter 2, 2016 and 5 times more than the number of newly registered voters just before the 2013 general elections (See Table 1 and Figure 1 below).

    There are many reasons for the record number of newly registered voters in Q3 2016. Many voters visited post offices to register themselves upon hearing the rumour that the registration deadline for the 14th general election, were it to be held in March 2017, was 30th September, 2016. There was also an increase in voter registration activities, organized by political parties and various NGOs, in cooperation with officials from the Election Commission.

    At the same time, one cannot help but be concerned that the voter registration activities are not being conducted on a level playing field. According to the 2015 Election Commission Annual Report, the EC appointed a total of 12,160 Assistant Registrars (AROs). 11,959 or 98.3% of the AROs are civil servants representing different government departments with only 48 or 0.4% representing political parties, 30 or 0.2% representing universities and 123 or 1.0% representing NGOs (See Table 2 and Figure 2 below)

    With civil servants making such a large % of the AROs, one cannot help but be concerned that some of these AROs from departments such as JASA, the Ministry of Information’s propaganda unit, are being used to register voters selectively, especially in the marginal parliament and state seats.

    In order to lessen the public’s fears that some of these AROs are not abusing their status, the Election Commission should publish a detailed breakdown of the number of new voters registered by civil servants according to department, by individual political parties, by student representatives in each university and by each NGO. Before the 13th general election, when many more political party representatives were appointed as AROs, the Election Commission used to publish the number of newly registered voters by political party. There is no reason why the EC cannot continue to disclose this information for all the AROs they have appointed.

    In addition, in order to level the playing field, the Election Commission should once again appoint representatives from political parties to be AROs especially since the EC themselves are often short-handed and cannot spare the time go to places such as pasar malams at night to register new voters.

    Better still, if the government can agree to Bersih’s demand of automatic registration of voters when they reach voting age, then doubts about the number of newly registered voters can be significantly reduced.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

  • Did the Ministry of Education try to rig the PISA 2015 sample schools in order to artificially boost Malaysia’s scores?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 8th of December, 2016

    Did the Ministry of Education try to rig the PISA 2015 sample schools in order to artificially boost Malaysia’s scores?

    When the Program for International Student Assessment (PISA) 2015 results were released on the 6th of December, 2016, officials from the Ministry of Education (MOE) took pride in the fact that Malaysia’s PISA’s scores for Mathematics, Reading and Science had improved from 421, 398 and 420 respectively in 2012 to 446, 431 and 443 respectively in 2015.[1] No doubt, Ministers, Deputy Ministers and politicians from the Barisan Nasional (BN) will use the latest PISA scores as ‘proof’ that Malaysia is on the ‘right track’ when it comes to the standard of education in the country. What they would have conveniently left out is the fact that Malaysia does not feature anywhere in the 2015 PISA rankings for Mathematics, Reading and Science.

    The official reason stated in the PISA report for Malaysia’s non-inclusion is:

    “In Malaysia, the PISA assessment was conducted in accordance with the operational standards and guidelines of the OECD. However, the weighted response rate among the initially sample Malaysian schools (51%) falls well short of the standard PISA response rate of 85%. Therefore, the results may not be comparable to those of other countries or to results for Malaysia from previous years.”[2]

    Why was it that only 51% of the schools initially chosen for the PISA test participated in the test in 2015? Was it because the Ministry of Education wanted to over-represent students from better performing schools and leave out students from low performing schools? This 51% participation rate raises many suspicions since Malaysia’s participation rate was 99.3% and 100% in PISA 2009 (151 out of 152 schools participated)[3] and PISA 2012 respectively.[4] It is hard to imagine any school principal not allowing his or her school to participate in the PISA 2015 test if the Ministry of Education had already chosen that school to be in the original sample.

    One suspects that the Ministry of Education over-sampled the high performing schools in the PISA 2015 sample and excluded some of the lower performing schools from the sample. For example, according to the website of the Negeri Sembilan Department of Education[5], the 14 schools listed as the PISA 2015 sample schools include all 7 (100%) of Negeri Sembilan’s secondary-level High Performing Schools or Sekolah Berprestasi Tinggi (SBT), and all 8 (100%) of its Fully Residential Schools or Sekolah Berasrama Penuh (SBP). The average student from a SBTs or SBPs will clearly outperform an average student from a regular secondary school.

    The evidence of a biased sample in favour of high performing schools can also been seen in PISA 2015’s own data on Malaysia.[6] Out of a total sample of 8861 students, 2661 or 30% were from fully residential schools (See Table 1 below). This is clearly an over sampling of students from fully residential schools since they only comprise less than 3.0% of the 15-year-old cohort in 2015.

    It is highly likely that those overseeing PISA 2015 saw that the Ministry of Education in Malaysia was trying to rig the sample size in order to artificially boost its scores. Is this why Malaysia was ultimately excluded from PISA 2015 rankings? The Minister of Education should explain so that we are not fooled into thinking that all is well and good in our education system as ‘evidenced’ by the latest PISA scores.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.thestar.com.my/news/nation/2016/12/06/malaysia-sees-improvement-in-pisa-scores/

    [2] From PISA 2014 Results (Volume 1), p. 340 (https://www.oecd.org/publications/pisa-2015-results-volume-i-9789264266490-en.htm):

    [3] See http://research.acer.edu.au/cgi/viewcontent.cgi?article=1000&context=pisa, p. 103

    [4] See https://www.oecd.org/pisa/pisaproducts/PISA-2012-technical-report-final.pdf, p. 181

    [5] http://www.spa.jpnns.gov.my/v4/viewpage.php?page_id=1

    [6] The document “Codebooks for the additional files for Albania, Argentina, Kazakhstan and Malaysia” (https://www.oecd.org/pisa/data/2015database/Codebook_CM2.xlsx, see the variable named “STRATUM”) states that students in Malaysia’s sample came from the following types of schools

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