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Time to introduce a RM100 public transportation pass in the Klang Valley

Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang and Assistant National Director for Political Education, on the 11th of January 2018

Time to introduce a RM100 public transportation pass in the Klang Valley

In October 2017, I had written about the lack of an increase in the ridership of the LRT, MRT and KTM Komuter despite the billions of Ringgit of investment poured into new projects.[1] The recently released Quarter 3 2017 rail statistics[2] by the Ministry of Transportation confirmed my fears that the LRT and MRT ridership spike in July and August 2017 due to the half-price fares were only temporary.

The Sungai Buloh-Kajang MRT line reached a peak daily ridership of 135,112 in the month of August when fares were 50%. But once the fare discount period was over, the daily ridership dropped down to 103,345, which is significantly less than the target of 150,000. Similarly, the daily ridership for the Kelana Jaya and Ampang LRT lines spiked up to 262,606 and 195,536 respectively in the month of August but once the discount period was over, the daily ridership numbers fell down to 219,568 and 157,533 for the Kelana Jaya and Ampang LRT lines respectively. In fact, the LRT ridership numbers for the month of September is even lower than that for March 2017 which averaged 238,602 and 169,057 for the Kelana Jaya and Ampang LRT lines respectively. (See Figure 1 and Table 1 below)

Figure 1: Daily ridership by month (January to September 2017) for the Kelana Jaya and Ampang LRT lines, the SBK MRT line and the KL Monorail

Source: Ministry of Transportation, Rail Statistics

Figure 1: Daily ridership by month (January to September 2017) for the Kelana Jaya and Ampang LRT lines, the SBK MRT line and the KL Monorail

Type of Service JAN FEB MAC APRIL MEI JUN JULAI OGOS SEPT
LALUAN KELANA JAYA             211,913             220,418             238,602             223,057             223,869             212,253             231,159             262,606             219,568
LALUAN AMPANG             151,459             155,140             169,057             158,500             160,816             154,485             157,242             196,536             157,533
LALUAN MRT SBK              23,471              12,532              13,786              12,927              13,057              12,288              62,344             135,112             103,345
KL MONORAIL              56,172              54,359              57,140              53,488              48,291              44,430              42,253              43,441              34,656

Source: Ministry of Transportation, Rail Statistics

The drop in the daily ridership on the LRT and MRT clearly shows that passengers are price sensitive. This is why it is necessary to introduce an affordable monthly public transportation pass to allow passengers to have unlimited rides on the LRT, MRT, Monorail and Rapid KL buses as a way to increase public transportation usage. Rapid used to have an RM150 monthly travel pass for the LRT but this was eliminated as part of the LRT fare hike in Dec 2015.

Pakatan Harapan has proposed in our alternative budget to introduce a RM100 unlimited travel monthly public transportation pass. I am confident that with the introduction of this pass, public transportation usage especially on the LRT, MRT and Rapid buses will increase significantly, perhaps even beyond the daily ridership figures set in August 2017 when the LRT and MRT fares were reduced by 50%.

[1] http://ongkianming.com/2017/10/05/media-statement-najib-must-explain-the-lack-of-increase-in-ridership-on-the-rail-system-in-the-klang-valley-despite-billions-spent-on-the-lrt-extension-the-mrt-and-the-ktm-komuter-double-tracking-proj/

[2] http://www.mot.gov.my/en/Pages/statistik-rel.aspx?RootFolder=%2Fen%2FStatistik%20Rel%2F2017%203%20-%20SUKU%20III%202017&FolderCTID=0x012000B98E763A4B4D9E45BF0A89A3AD9C0C63&View={06807F3D-F85A-41AF-A229-BF053BC42139}

Malaysia more likely to face a budget crisis than to balance the budget by 2022 or 2023

Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang and Assistant Political Education Director, on the 9th of January 2018

Malaysia more likely to face a budget crisis than to balance the budget by 2022 or 2023

The recent admission by the Second Minister of Finance Datuk Seri Johari Abdul Ghani that the Malaysian government would not be able to achieve a zero budget deficit by 2020 should not come as a surprise among those who have been studying the Malaysian budget.[1] This is despite the many promises announced by Prime Minister Najib that Malaysia would reach this zero budget deficit by 2020.

Malaysia’s debt service charges increased from RM14.2 billion in 2009 to RM30.8 billion in 2018. The share of the budget to pay for debt service charges has increased from 9.1% in 2009 to 13.2% in 2018 (estimated). (See Figures 1 and 2 below)

Figure 1: Federal Government Operating Expenditure by Object including debt service charges (2009 to 2011)

Figure 2: Federal Government Operating Expenditure by Object including debt service charges (2016 to 2018)

This increase in the debt service charges as a % of the budget should not be surprising given that the growth in the federal debt is much higher than the increase in the federal revenue. From 2009 (Najib became Finance Minister in September 2008) to 2017, the federal debt grew by 89.7% or an annual growth rate of 11.2% compared to a 37.5% growth or an annual growth rate of 4.7% for the federal revenue during this period (see Table 1 and Figure 3 below).

Table 1: Growth in the Federal Debt versus Federal Revenue, 2009 to 2017

Figure 3: Growth in the Federal Debt versus Federal Revenue, 2009 to 2017

What should be MORE worrying is the fact that payments for debt service charges incurred by 100% owned Ministry of Finance (MoF) Special Purposes Vehicles are also being paid by the government but are being ‘hidden’ in other parts of the budget. For example, payments for strategic sectors have increased from RM1.286 billion in 2017 to RM3.748 billion in 2018 according to the 2018 budget estimates. Included in this payment is a RM1.1 billion payment to Dana Infra / Govco, which is the SPV in charge of issuing debt to finance the MRT lines and also the Pan Borneo Highway. This was verified in a written parliament to me by the Ministry of Finance II dated 29 November 2017 (Appendix 1).

In addition, other repayments (Lain-Lain Bayaran Balik) have also increased from RM1.528 billion in 2017 to RM4.236 billion in 2018. The biggest portion of this payment is for Private Finance Initiatives (PFIs) totalling RM3.971 billion (see Appendix 2).

PFIs are actually expenditure for development projects that are funded by 100% owned MOF SPVs such as Pembinaan PFI Sdn Bhd which has accumulated debt of approximately RM26 billion[1] and Pembinaan BLT Sdn Bhd which issued RM10 billion worth of bonds that were to be financed by yearly ‘rental’ payments by the government of Malaysia to fund the building of police quarters.[2]

If we add up these off-budget sheet debt service charges (approximately RM5 billion for 2018), the total debt service charge would be RM35 billion or approximately 15% of the total budget which is just at the threshold under the administrative fiscal rules. (See Figure 4 below)

Figure 4: Description of Debt Service Charges in the 2018 Economic Report (pg. 84)

As the amount of debt issued by 100% MOF owned SPVs continue to increase with projects such as the MRT Line 2 and Line 3, the LRT Line 3 and the Pan Borneo Highway, we can expect the total debt service charges (hidden and non-hidden) to continue to grow faster over the next decade. This can be partly seen in the 21% increase in the debt guaranteed by the federal government from RM187.32 billion at the end of 2016 to RM226.88 billion at the end of September 2017.[4]

I am not against development expenditure which brings long term benefits to the rakyat. But by ‘hiding’ the debt servicing obligations of such expenditure behind these SPVs, we are allowing wastage and corruption in other parts of the operating and development expenditure (under the Prime Minister’s Department, for example) to persist. What is worst for the rakyat is when funding to public higher education institutions and public hospitals are cut in order to pay for these ‘hidden’ debt servicing charges.

If this trend continues, I don’t believe that the government would be able to achieve a zero budget deficit even by 2022 or 2023. In fact, it is much more likely that we will have a budget crisis on our hands as our budget position worsens.

Appendix 1: Bayaran untuk Sektor Strategik 2018 (RM3.748 billion)

Appendix 2: Lain-Lain Bayaran Balik (RM4.236 billion)

[1] https://www.thestar.com.my/business/business-news/2018/01/05/fiscal-space-needed-to-balance-govt-finances-by-2022-or-2023/

[2] http://www.themalaymailonline.com/malaysia/article/putrajaya-confirms-pembinaan-pfi-debt-pile-near-rm27b

[3] https://www.marc.com.my/index.php/marc-rating-announcements/512-marc-affirms-its-aaais-rating-on-aman-sukuk-berhad-s-rm10-0-billion-islamic-mtn-programme-30102015

[4] http://www.theedgemarkets.com/article/malaysias-spiralling-debt-burden

The Election Commission should redo the entire constituency delimitation exercise to add parliament seats in Selangor to reduce the discrepancy in the number of voters per seat

Media Statement by Dr. Ong Kian Ming, MP for Serdang and Deputy Political Education Director for the DAP, on the 20th of December 2017
The Election Commission should redo the entire constituency delimitation exercise to add parliament seats in Selangor to reduce the discrepancy in the number of voters per seat
With the Court of Appeal’s rejection of the stay application by the Selangor government in its case against the Election Commission’s constituency delimitation exercise, this means that the first round of public hearings in Selangor can begin. Rather than starting these public hearings, the Election Commission should redo the entire constituency delimitation exercise and increase the number of parliament seats in Selangor.
According to the electoral roll updated till the 2nd quarter of 2017, the number of voters in Selangor stood at 2.33 million, which is by far the highest in the country (See Figure 1 below).
Figure 1: Total number of voters in the states in Peninsular Malaysia (2nd Quarter 2017)

At the same time, the average number of voters per seat in Selangor has increased to 105,937 as of the 2nd quarter of 2017, which is by far the highest in the country (See Figure 2 below).
Figure 2: Number of voters per seat by state in Peninsular Malaysia (2nd Quarter 2017)

Within Selangor, there are now 12 seats with more than 100,000 voters (See Figure 3 below).
Figure 3: Total Voters by Parliament Seat in Selangor (2nd Quarter 2017)

The number of voters in the largest seat – P109 Kapar with 164,177 voters – is 4 times that of the smallest seat – P92 Sabak Bernam with 40,164 voters.
The proposed delimitation plan by the Election Commission will do nothing to decrease these discrepancies in Selangor. In fact, my own parliament seat of Serdang, which will be renamed into Bangi, will likely have more than 165,000 voters using the new boundaries.
This is a clear violation of the one-man-one-vote principle WITHIN the state of Selangor and this is one of the main reasons why the Selangor state government took up the court case against this blatantly unfair delimitation exercise.
Any reasonable person would be able to see how unfair this proposed delimitation plan is. Instead of continuing with the public hearings, the Election Commission should go back to the drawing board and begin the exercise anew but this time, with the addition of parliament seats in the state of Selangor.
(I will deal with the issue of the state seats in a separate media statement.)