• Is PERMATA expanding its reach just like the Prime Minister’s Department?

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

    Is PERMATA expanding its reach just like the Prime Minister’s Department?

    My colleague, Liew Chin Tong, MP for Kluang, and Dr Dzulkefly Ahmad, Strategy Director for Parti Amanah Negara, highlighted how the budget for the Prime Minister’s Department had doubled from RM10b in 2009 to RM20b in 2016. At the same time, the jurisdiction reach and programs under the Prime Minister’s Department also expanded significantly under Najib’s tenure. Almost any new large scale spending program whether it is PR1MA housing or the Pan-Borneo Expressway was parked under the Prime Minister’s Department.

    It seems that the same kind of over reach has been emulated by the PERMATA program which is also parked under the Prime Minister’s Department. From its initial humble beginnings to provide a conducive learning environment for gifted students aged below 5 years of age, PERMATA has significantly expanded its reach and also the number of programs under its jurisdiction.

    For example, in six years, the number of Permata childcare centers or Pusat Anak Permata Negara (PAPN) has increased to a total of 88 centers in every state around the country.[1]

    Picture 1: Official Visit by the Patron of PERMATA, Datin Seri Rosmah, to the Putrajaya PERMATA center accompanied by the wife of the President of Indonesia, Ibu Iriana Joko Widodo [2]

    A Kolej PERMATA Pintar was built in UKM in order to cater to ‘gifted’ students from ages 9 to 15 at a cost of RM83m (RM20m for Phase 1 and RM63m for Phase 2). Summer camps are run, in collaboration with the Center for Talented Youth, Johns Hopkins University, for some of these gifted children.

    Picture 2: Site Visit to PERMATA Pintar by the Patron of PERMATA

    The PERMATA Seni program was then established in order to identify talented children in the area of arts including singing, dancing and music. A total of RM17.5m was allocated to this program from 2010 to 2014.

    Table 1: Allocation for PERMATA Seni from 2010 to 2014

    Year Allocation (RM million)
    2010 1.5
    2011 4.2
    2012 3.9
    2013 4.2
    2014 3.7
    Total 17.5

    Source: PERMATA website

    Picture 3: Patron of PERMATA at one of the performances of PERMATA SENI

    Perkasa Remaja was then established for the purpose of reaching out to ‘at risk’ youth by introducing them to community-based preventive programs (called PERKASA@community) and through a curative camp-based intervention program (called PERKASA@camp).[3]

    Picture 4: Patron of PERMATA at a closing ceremony for a Perkasa@Remaja camps

    The total allocation for Perkasa Remaja from 2010 to 2014 was RM6.4m.

    Table 2: Allocation for PERKASA Remaja from 2010 to 2014

    Year Allocation (RM million)
    2010 1.4
    2011 0.8
    2012 0.7
    2013 1.4
    2014 2.1
    Total 6.4

    PERMATA Kurnia was established as an outreach initiative for autistic children via an autism center as well as through research and training.[4] An RM10m autism center was built through the PERMATA Kurnia initiative in 2014.

    Picture 5: Opening of the PERMATA Kurnia Autism Center

    PERMATA Insan is an initiative to identify gifted children in the area of Quranic and Islamic studies and is parked under the Islamic Science University of Malaysia (USIM) with the intention of nurturing these talents as future Islamic scholars.

    A total of RM24m was allocated to PERMATA Insan including RM18m for a new building at USIM.

    Table 3: Allocation to PERMATA Insan from 2010 to 2014

    Year Allocation (RM million)
    2010 1.28
    2011 0.8
    2012 0.79
    2013 1.449
    2014 19.6*
    Total 24.0

    (* including RM18m for the building of a PERMATA Insan Center at USIM)

    Picture 6: Visit by PERMATA Patron to the students of PERMATA Insan

    Finally, a speciality children’s hospital called the Hospital Kanak-Kanak PERMATA is currently being constructed. The projected cost of this project Is RM600m and is financed via a build-lease-maintain-transfer (BLMT) Private Finance Initiative (PFI) model. According to PERMATA’s website, this hospital was inspired by its Patron, after she had visited many children’s hospitals around the world.[5] The expected completion date for this hospital is in 2017.

    Picture 7: Ground breaking of the HKK PERMATA attended by the PM and his wife, the Patron of PERMATA

    All in all, a total of RM518m has been allocated to PERMATA for its various programs, out of which RM190m was spent on development expenditure i.e. the building of the various centers and another RM328m was spent on operating expenditure, the majority of which goes towards paying the salaries of teachers at the Permata Negara early children learning centers and the staff at the PERMATA division under the Prime Minister’s Department. (See Table 3 below)

    Table 4: OPEX and DEVEX of PERMATA, 2009 to 2016

    Year Operation Expenditure Development Expenditure Total
    2009                    30,659,637                          20,000,000     50,659,637
    2010                    43,820,262  –     43,820,262
    2011                    38,511,245                          63,926,800   102,438,045
    2012                    30,981,604                            8,000,000     38,981,604
    2013                    39,029,950  –     39,029,950
    2014                    40,360,800                          28,000,000     68,360,800
    2015                    52,000,000                          41,737,500     93,737,500
    2016                    52,298,400                          29,200,000     81,498,400
    Total                  327,661,898                       190,864,300   518,526,198

    Source: PERMATA

    While these initiatives may not be bad initiatives in themselves, the following questions must be raised:

    • Why are the other ministries or departments not stepping in to lead some of these initiatives e.g. the Ministry of Health for the Children’s Hospital and the Ministry of Education for the identification and training of Gifted Children rather than leaving this for PERMATA to drive?
    • To what extent has the various PERMATA programs been able to achieve its goals?
    • What is to stop PERMATA from further expanding into other areas which concern the youth and children and over reaching into more areas?

    In the interest of future sustainability, shouldn’t these programs be parked under existing ministries and / or the relevant government agency or department? Without any checks and balances, PERMATA may continue to expand in the same manner as what has been happening in the Prime Minister’s Department over the past 8 years under the leadership of Prime Minister Najib.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.programpermata.my/en/negara/centres
    [2] http://www.programpermata.my/en/negara/photo_gallery/lawatan-rasmi-indonesia
    [3] http://www.programpermata.my/en/remaja/about
    [4] http://www.programpermata.my/en/kurnia/about
    [5] http://www.programpermata.my/en/hpkk/about

  • Will the political financing regulations be used selectively against opposition parties and its supporters?

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 3rd of October, 2016

    Will the political financing regulations be used selectively against opposition parties and its supporters?

    The recently released report from the Consultative Committee on Political Financing (JKNMPP) has some recommendations which are not without merit. Indeed, some of these recommendations have been supported by the opposition in the past including the recommendation for state-funding to be provided for the operations of constituency offices of elected Members of Parliament and state legislative members regardless of political affiliation. The recommendation to create a parliamentary standing committee on Political Financing merits consideration but needs to be discussed in the larger context of creating a number of parliamentary standing committees. The recommendation for greater transparency in the awarding of Public Private Partnership contracts has been reiterated countless times by opposition Members of Parliament for many years.

    The recommendation that state-owner enterprises of all types, be it at the federal or state or local levels, and all their subsidiaries be banned from making direct, indirect or in-kind contributions to politicians or political parties is long overdue. In fact, this can be done with a directive from the PM or the chief executive of the state, without necessarily involving additional legislation.

    But one cannot also turn a blind eye to some of the obvious shortcomings of some of the recommendations. Notably, the lack of any limits or caps on the amount which can be donated to political parties or to individual politicians and the lack of any spending limits by a political party or individual tilts an already uneven playing field even more to the favour of the ruling coalition, the Barisan Nasional (BN). There were also no recommendations for public disclosure of assets by politicians, especially those holding government positions.

    But the greatest shortcoming of this report is something which is outside the power and scope of work for this committee. There is nothing to prevent the BN from selectively implementing or modifying the recommendations of the committee in such a way as to enhance its own powers and put greater pressure on opposition parties and its supporters.

    For example, under the proposed Political Donation and Expenditure Act (PDEA), a very powerful “Office of the Controller of Political Donations and Expenditure” will be created. Political parties and politicians must report their political donations to this Controller who will have powers to audit the accounts. In addition, this Controller also has the power to confiscate donations if they are suspected to be from ‘dubious’ sources. We have seen how institutions which are supposed to be independent have been used to benefit the BN. The Elections Commission is the most important example and we have proof of this in the recently proposed 2016 delimitation exercise. We have no assurances that when the pressure in put on this Controller, he or she will not buckle to the needs of the BN leadership.

    Worse still, the proposed PDEA may be modify the recommendations of the JKNMPP by allowing the Controller to ban political parties from taking place in elections because of the non-compliance of one branch in the party with regards to political financing disclosure. A compliant Controller may then be pressured to use his or her power to target opposition political parties.

    Even though the JKNMPP recommends that steps should be taken to criminalise discrimination or victimisation of donors by introducing provisions in existing anti-discrimination laws or the introduction of a complete new law, it would not be surprising if this recommendation is totally ignored by the BN.

    We have too many examples of how laws which are supposed to ‘good’ for democracy and political activity be abused by the BN government. The Peaceful Assembly Act 2012 which was supposed to strengthen the right of assembly in the country, according to the establishment, ended up being used by the current regime to charge NGO activists like Bersih’s Maria Chin and Jannie Lasimbang as well as opposition politicians such as Nik Nazmi and Chong Chien Jen (among many others). Who is to say that this PDEA will not be abused in a similar manner?

    While there are merits in some of the recommendations proposed by the JKNMPP, the current political climate makes it very difficult for opposition parties and politicians to trust that the BN government will NOT implement or modify these recommendations in a selective and biased manner that is in its favour and which is detrimental to opposition parties and the practice of democracy here in Malaysia.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

  • 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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