• 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.

  • Five Recommendations for the Taman Tugu project

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 7th of September, 2016

    Five Recommendations for the Taman Tugu project

    The announcement of the Taman Tugu project[1] last weekend by Prime Minister Najib Tun Razak has received mixed reactions from the public. As a regular jogger along the “double hill” route which goes past Tugu Negara[2] (See Figure 1 below) and in the nearby Lake Gardens / Taman Botani[3], here are my five recommendations for this project.

    Figure 1: Part of the Double Hill 12km loop which goes past Tugu Negara

    1) Taman Tugu must be cost effective and transparent

    I echo the concerns expressed by my colleague, Rafizi Ramli, on the high cost of this project, estimated by RM650 million, 75% of which or RM500 million, will be paid for by Khazanah.[4] Many people have asked why such a large amount of money needs to be spent on an urban park while overseas JPA scholarships have been cancelled and allocation to public universities have been cut.[5] Even though the majority of the expenditure will come from Khazanah and not from the government budget, since Khazanah is 100% owned by the Ministry of Finance, it is necessary for both Khazanah as well as the Minister of Finance, namely the Prime Minister, to explain why this expenditure is necessary in the context of significant budget cuts in other areas.

    In addition, since Khazanah is technically a private company, and not a government department, it does not have to go through the normal tender processes that most ministries have to adhere to via eperolehan.[6] To assure the public that the expenditure on the Taman Tugu project is transparent and cost-effective, it should make all significant contracts via open tender and to announce the results publicly.

    2) Taman Tugu must be free to the public

    The Taman Tugu project is actually not a new project. It was announced as one of the Entry Point Projects (EPP7: Creating Iconic Places and Attractions) under the Greater KL National Key Economic Areas (NKEAs) way back in 2010. The initial project was to “create a Malaysia Truly Asia Center (MRAC), an integrated cultural tourism park managed by Themed Attraction Resorts, a subsidiary of Khazanah Nasional.[7] This project was suspended in August 2014 because of ongoing land issues.[8] There was also initial speculation that this attraction would be part of a leisure and tourism entity that would be listed by Khazanah.[9]

    Now that it has been revived under the Taman Tugu project, Khazanah must reassure that public that accessibility to this park will be free of charge. While there may be parts of the park where the public may have to pay to use certain services (such as a proposed outdoor adventure area featuring rope courses and a flying fox), the majority of the park must be free of charge to use. This is the model used by the Central Park in New York where access to certain attractions such as the zoo require an entrance fee but the majority of the park is free to use.[10]

    The initial masterplan of Taman Tugu seem to indicate that most of the park are green spaces that are open for public access (See Figure 2 below).

    3) Taman Tugu must allow existing users continued access to recreational facilities

    I am glad to note that Padang Merbok is not park of the area that has been designation as part of Taman Tugu. Many groups use Padang Merbok especially during the weekends for various recreational activities including rugby, football, bootcamp and as a start and finish point for runs (See Figure 3 below). Places such as Padang Merbok must be preserved for public access. Khazanah should ensure that public access to popular jogging routes such as the aforementioned “Double Hill” route is allowed even during the construction phase of Taman Tugu. Better still, Khazanah should consult the various groups which use Padang Merbok and the surrounding areas for recreation activities so that their inputs can be used to enhance the facilities in and surrounding Taman Tugu.

    Figure 2: Masterplan of the Taman Tugu Project[11]

    Figure 3: One of the many runs which use Padang Merbok as a start and finishing point

    4) Must be integrated and accessible

    I am glad to note that the Taman Tugu masterplan has taken into consideration the issue of connectivity to public transportation and other nearby recreational attractions such as Muzium Negara, Lake Gardens and the KL Bird Park, just to name a few (See Figure 4 below).

    Figure 4: Connectivity of Taman Tugu to other attractions and public transportation[12]

    But this is not sufficient. For example, according to google maps, it takes 35 minutes to walk from the Bank Negara KTM station to Tugu Negara via the proposed pedestrian walkway showed in Figure 4 and 30 minutes to walk via Jalan Parlimen (See Figure 5 below).

    Not many Malaysians would be willing to walk that far (even if the walkway is covered). In addition, not many people would be willing to use the KTM Komuter services (30 minutes during peak hours and 60 minutes during non-peak hours, according to KTM’s latest announcement on its twitter feed[13]). Khazanah needs to provide for better public transportation to Taman Tugu than what is currently on its Taman Tugu website.

    Figure 5: Walking time and distance from the Bank Negara KTM to Tugu Negara

    5) Taman Tugu must be sustainably managed

    Finally, Khazanah must reveal its plan on how Taman Tugu will be managed. Taman Tugu should not be managed as a for-profit endeavour in order to ensure continued free public access. At the same time, it must also be run sustainably so that its maintenance costs can be covered. One possible model is the Central Park Conservancy, a private not for profit entity, which has a long term contract to manage Central Park in New York.[14]

    Initial reports indicate that Taman Tugu will be placed under a public trust and that it will be preserved as a green lung in perpetuity.[15] Details of this trust and the management of Taman Tugu should be announced as soon as possible in order to assure the public that this project is not a money making venture but a project which will truly benefit the public.

    I call upon Khazanah to honour the promise of its Managing Director, Azman Mokhtar who said that Khazanah will be “embarking on a public outreach program through multiple channels to seek feedback and suggestions from the public at large, as well as broadening the number of development partners and donors”.[16] I hope that this will be a sincere public outreach effort and not an empty public relations exercise.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.khazanah.com.my/Media-Downloads/News-Press-Releases/2016/Prime-Minister-of-Malaysia-launches-Taman-Tugu-Pro

    [2] https://www.google.com/webhp?hl=en&sa=X&ved=0ahUKEwiN5ubM6PrOAhUaSo8KHVwKBscQPAgD#hl=en&q=double+hill+bukit+tunku

    [3] http://www.klbotanicalgarden.gov.my/

    [4] http://rafiziramli.com/2016/09/apa-jaminan-perdana-menteri-rm650-juta-kos-taman-tugu-tidak-digunakan-untuk-mengumpul-dana-pru14/

    [5] http://www.malaysiakini.com/news/354776

    [6] http://home.eperolehan.gov.my/home

    [7] http://etp.pemandu.gov.my/Greater_Kuala_Lumpur_Klang_Valley-@-Greater_Kuala_Lumpur_-_EPP_7-;_Creating_Iconic_Places_and_Attractions.aspx#sthash.MwnQiDJv.dpuf

    [8] http://www.travelandtourworld.com/news/article/malaysia-truly-asia-centre-project-suspended-land-issues/

    [9] http://www.thesundaily.my/news/1183898

    [10] http://www.centralparknyc.org/things-to-see-and-do/attractions/central-park-zoo.html

    [11] http://tamantugu.com.my/en/things-to-see-do/

    [12] http://tamantugu.com.my/en/connectivity/

    [13] https://twitter.com/ktmkomuter/status/773070515346952192

    [14] http://www.centralparknyc.org/about/about-cpc/

    [15] http://www.thestar.com.my/news/nation/2016/09/04/taman-tugu-project-launch/

    [16] http://www.khazanah.com.my/Media-Downloads/News-Press-Releases/2016/Prime-Minister-of-Malaysia-launches-Taman-Tugu-Pro

  • 与其要求国库研究所(KRI)来解释有关霹雳州政府的最新报告,掌管经济策划单位(EPU)的拿督阿都拉曼达兰应先在国家统计局上一堂统计课



    据昨天报道,掌管经济策划单位(EPU)的拿督阿都拉曼达兰曾表示国库研究所(KRI)在房屋报告二中将霹雳州列入全马第二最贫穷州属是“不合理”和“不符合逻辑”的。[1] 另外,他也认为国库研究所(KRI)需要更准确的数据和报告,以便可以纠正这份报告。[2]阿都拉曼达兰还表示他已指示经济策划单位(EPU)的总执行长安排与国库研究所(KRI)和霹雳州政府的会面,以进一步地解释报告里的统计数据。

    从掌管经济策划单位(EPU)的部长针对国库研究所(KRI)报告所发表的言论,我对他的无知感到十分地震惊。[3] 根据统计局所进行的2014年家庭收入和基本生活需求的全国性调查,霹雳在每月收入少过6000令吉的家庭百分比排行榜是位居全国第二(请参阅下图列表和数据来源)。





    与其指示经济策划单位(EPU)的总执行长安排与国库研究所(KRI)和霹雳州政府的会面,部长更应向统计局请教有关2014年家庭收入和基本生活需求普查的结果和了解如何理解这些统计数据。事实上,我相信任何一名来自Perdana Fellows的实习生都有能力向他汇报有关统计学的基本概念及如何理解这些报告的内容。

    [1] http://english.astroawani.com/business-news/khazanah-report-perak-unreasonable-rahman-dahlan-115860 and http://www.bernama.com/bernama/v8/bm/ge/newsgeneral.php?id=1279527

    [2] http://www.utusan.com.my/berita/politik/rahman-sangkal-laporan-perak-negeri-miskin-1.378193#sthash.Bx2Z3e9D.dpuf

    [3] http://www.krinstitute.org/assets/upload/KRI_State_of_Households_II_280816.pdf

  • Sebagai Menteri bertanggungjawab untuk Unit Perancang Ekonomi, Abdul Rahman Dahlan perlu mempelajari statistik daripada Jabatan Perangkaan dan bukannya meminta Institut Penyelidikan Khazanah (KRI) untuk menerangkan laporan terbaru mereka kepada Kerajaan Negeri Perak

    Kenyataan Media oleh Dr. Ong Kian Ming, Ahli Parlimen Serdang pada 5hb September 2016

    Sebagai Menteri bertanggungjawab untuk Unit Perancang Ekonomi, Abdul Rahman Dahlan perlu mempelajari statistik daripada Jabatan Perangkaan dan bukannya meminta Institut Penyelidikan Khazanah (KRI) untuk menerangkan laporan terbaru mereka kepada Kerajaan Negeri Perak

    Menurut laporan semalam, Abdul Rahman Dahlan iaitu Menteri yang bertanggungjawab kepada Unit Perancang Ekonomi (EPU), telah berkata bahawa Laporan Keadaan Isi Rumah II oleh Institut Penyelidikan Khazanah (KRI) adalahtidak munasabah’ dan ‘tidak logik’ kerana melaporkan bahawa Negeri Perak adalah negeri yang kedua termiskin di Malaysia.[1] Lanjutan daripada itu, Menteri juga telah menyatakan bahawa laporan dan statistik yang tepat perlu diberi kepada KRI supaya laporannya dapat diperbetulkan.[2] Abdul Rahman juga telah mengarahkan Ketua Pengarah EPU untuk memanggil mesyuarat antara KRI dan Kerajaan Negeri Perak untuk menerangkan statistik di dalam laporan itu.

    Saya benar-benar terkejut dengan kejahilan menteri yang bertanggungjawab terhadap EPU seperti yang ditunjukkan dalam hal laporan KRI ini.[3] Data yang menunjukkan bahawa Perak adalah negeri kedua tertinggi dari segi peratus isi rumah berpendapatan kurang dari RM6,000.00 sebulan adalah daripada Laporan Penyiasatan Pendapatan Isi Rumah dan Kemudahan Asas 2014, yang telah dijalankan oleh Jabatan Perangkaan (lihat carta dan sumber di bawah).

    Laporan Penyiasatan Pendapatan Isi Rumah dan Kemudahan Asas juga menunjukkan bahawa Perak adalah negeri kedua tertinggi dari segi pendapatan isi rumah kurang dari RM2,000.00 sebulan, iaitu 21.3% (selepas Kelantan iaitu 31.4%) (lihat angka di bawah).

    Sumber: Laporan Penyiasatan Pendapatan Isi Rumah dan Kemudahan Asas 2014, Jabatan Perangkaan

    Mungkin betul apa yang diperkatakan oleh Abdul Rahman Dahlan bahawa Perak mungkin bukan negeri kedua termiskin di Malaysia, memandangkan terdapat cara lain untuk mengukur pendapatan isi rumah atau per kapita, seperti min dan purata pendapatan isi rumah (di mana Perak adalah negeri ketiga terbawah pada 2014), gaji median (negeri ketujuh terbawah pada 2015) dan gaji purata (negeri kelima terbawah pada 2015).

    Namun untuk mempersoalkan laporan KRI yang berasaskan sumber daripada Jabatan Perangkaan (yang turut di bawah penyeliaan Menteri yang bertanggungjawab terhadap bidang kuasa EPU, pada kali terakhir saya periksa) menunjukkan tahap kejahilan dan ketidakcekapan yang agak memeranjatkan, itupun untuk tahap Abdul Rahman Dahlan.

    Daripada meminta Ketua Pengarah EPU untuk memanggil mesyuarat antara KRI dan Kerajaan Negeri Perak, lebih baik Menteri bertanya kepada Jabatan Perangkaan untuk memberi penerangan kepada beliau berkenaan Laporan Penyiasatan Pendapatan Isi Rumah dan Kemudahan Asas 2014 dan bagaimana untuk memahami statistik kaji selidik ini. Malahan, saya yakin bahawa salah seorang pelatih Felo Perdana di bawah Menteri dapat menerangkan kepada beliau berkenaan asas statistik dan bagaimana untuk memahami laporan tersebut.

    Dr. Ong Kian Ming
    Ahli Parlimen Serdang

    [1] http://english.astroawani.com/business-news/khazanah-report-perak-unreasonable-rahman-dahlan-115860 and http://www.bernama.com/bernama/v8/bm/ge/newsgeneral.php?id=1279527

    [2] http://www.utusan.com.my/berita/politik/rahman-sangkal-laporan-perak-negeri-miskin-1.378193#sthash.Bx2Z3e9D.dpuf

    [3] http://www.krinstitute.org/assets/upload/KRI_State_of_Households_II_280816.pdf

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