• SEDA should make the awarding of Feed in Tariff (FiT) Quotas for Solar PV >425kW to 1MW to be as transparent as the awarding of FiT Quotas for Solar PV <425kW

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 10th of March, 2015

    SEDA should make the awarding of Feed in Tariff (FiT) Quotas for Solar PV >425kW to 1MW to be as transparent as the awarding of FiT Quotas for Solar PV <425kW

    I congratulate the Sustainable Energy Development Authority (SEDA) for successfully conducting their 2nd open ballot for the allocation of FiT quotas for Solar PVs <425kW for non-individuals yesterday, the 9th of March, 2015 at the Everly Hotel.[1] The balloting, which was conducted by Deputy Minister for Energy, Green Technology and Water, Dato’ Seri Mahdzir bin Khalid, and was audited by Deloitte Enterprise Risk Services Sdn Bhd with observors from the National Audit Department and the Malaysian Institute of Integrity. Many of the Solar PV companies which put in applications for the FiT quota were also present to witness the balloting process. A total of 20MW of FiT quotas were awarded, 16MW in Peninsular Malaysia and 4MW in Sabah.

    However, SEDA did not announce the allocation of FiT quotas for Solar PVs >425kW to 1MW for non-individuals at yesterday’s open ballot. Last year, SEDA had told industry players that applications for the FiT quota >425kW to 1MW would be evaluated by SEDA using a merit point system.[2] In the same presentation last year, SEDA also said that if there were any ties in the number of points scored by the applicants, a similar open ballot would be conducted yesterday for the FiT quotas above 425kW (See Appendix 1 below). But sadly, no such ballot was conducted yesterday.

    In an earlier statement, I had asked SEDA to keep to its promise to the industry players to publish the merit points of all 146 applicants for the FiT quotas >425kW to 1MW.[3] I reiterate this call so that SEDA’s hard won reputation for transparency via its open ballot practice will not be jeopardized. The need to be transparent is even more necessary in light of the press statement issued by my colleague, Jimmy Wong, MP for Kota Kinabalu where he stated that a whistle-blower had told him of pressure being exerted on Sabah Electricity Sdn Bhd (SESB) to provide a favourable power system study (PSS) score on a well-connected solar PV company.[4] To show that it has nothing to hide, SEDA must release all the merit point scores of all 146 applicants for the Fit quotas >425kW to 1MW when it announces the successful applicants.[5]

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&y=45&s=4602

    [2] http://www.seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&s=27

    [3] http://ongkianming.com/2015/02/10/press-statement-seda-must-continue-to-uphold-the-highest-standards-of-transparency-in-the-allocation-of-the-feed-in-tariff-fit/

    [4] http://www.dailyexpress.com.my/news.cfm?NewsID=97759

    [5] http://www.seda.gov.my//?omaneg=00010100000001010101000100001000000000000000000000&y=45&s=4502

  • SEDA must continue to uphold the highest standards of transparency in the allocation of the Feed in Tariff (FiT)

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 10th of February, 2015

    SEDA must continue to uphold the highest standards of transparency in the allocation of the Feed in Tariff (FiT)

    My parliamentary colleagues Tony Pua, MP for PJ Utara, Nurul Izzah, MP for Lembah Pantai and myself commended the Sustainable Energy Development Authority (SEDA) for conducting its first open ballot for the Solar Power Feed In Tariff (FiT) quota for non-individual applicants with <425 kW capacity. This open ballot was conducted transparently and satisfied the demands of all those who put in bids for the quota, including those who did not manage to obtain a quota. SEDA is to be commended for conducting another open ballot on the 9th of March, 2015, for 20MW of the solar PV quota of up to 425 kW.[1]

    To continue to uphold the highest standards of transparency, SEDA must also be equally transparent with the allocation of 32 MW for the solar PV quota capacity above 425 kW and up to 1 MW. SEDA has already published the Merit Points Criteria which includes the track record of the service provider, the ability of the shareholder to finance the project and the distance to the connection point.[2] The awarding of this 32 MW of the solar PV quota will be done based on the merit points obtained by each applicant and SEDA has promised to publish the merit points of all applicants on its website and to conduct an open ballot in the case of a tie.

    SEDA must fulfil these promises in order to increase the transparency of the awarding of the solar PV quota. In 2014, 10MW for the solar PV quota capacity above 425 kW and up to 1MW were awarded based on merit points but the detailed results were never published online or publicly disclosed. The system which SEDA has proposed which includes the online publication of the results is an improvement on the process used in 2014. In the interest of transparency, I note that SEDA has also published the names of all 146 companies which submitted applications for the solar PV quota capacity above 425 kW and up to 1 MW.[3]

    The Feed In Tariff (FiT) is funded by the Malaysian consumer who have to pay 1.6% of their total electricity bill as their contribution to the Renewable Energy (RE) fund. In 2013 alone, RM398m was collected from the then 1% additional surcharge imposed on the electricity bill for consumers using more than 300kwH per month. The cumulative amount collected for the RE fund inclusive of interest was RM928m at the end of 2013.[4] These amounts would certainly have increased in 2014 given the increase in the surcharge from 1% to 1.6%. SEDA has the responsibility to ensure the highest standards of responsibility in using the rakyat’s money to promote sustainable energy in the country.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&s=2158&details=162

    [2] http://www.seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&y=45&s=4478

    [3] http://www.seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&y=45&s=4502

    [4] SEDA Annual Report 2013 (http://seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&s=4024)

  • Make the MACC truly independent and give out all public contracts via published open tender to demonstrate the government’s commitment in fighting corruption

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 4th of December, 2014

    Make the MACC truly independent and give out all public contracts via published open tender to demonstrate the government’s commitment in fighting corruption

    We welcome the news that Malaysia’s ranking and score in the 2014 Transparency International Corruption Perception Index (CPI) has improved from 53 in 2013 to 50 in 2014 (ranking) and from 50 to 52 (score). This is a marked improvement from Malaysia’s CPI ranking and score in 2011 of 60 and 4.3 (out of 10), respectively.

    Credit has to be given to the Fighting Corruption National Key Results Area (NKRA) team under the Government Transformation Program (GTP), the NGOs involved in fighting corruption such as Transparency International, the Institute of Democracy and Economic Affairs (IDEAS), National Oversight and Whistle-blowers (NOW) and the Center to Combat Corruption and Cronyism (C4) as well as the many elected representatives at the state and federal levels for their hard work and contributions in putting the spotlight on government corruption and finding ways to reduce it.

    But we should not be satisfied with the improvement in the CPI 2014 ranking and score. Much more needs to be done in order to show that the improvement in the ranking and score is not just due to good publicity on the part of the government.

    In order to demonstrate its political commitment to fighting corruption, the government should prioritize increasing the independence of the Malaysian Anti-Corruption Commission (MACC) and to significantly increase transparency for government contracts.

    Firstly, MACC’s independence must be increased by making it into a separate service commission with power to hire (and fire) its own staff, to make it harder for the Chief Commissioner to be removed and for it to be given independent prosecutorial powers with proper oversight including from members of civil society and parliament.

    Secondly, all government contracts MUST be awarded via open, competitive tender. If there are cases where a direct negotiation is necessary, the government must EXPLAIN why this is the case. In addition, the terms of the tender and the subsequent contracts must be made publicly available. Right now, only a limited number of directly negotiated contracts are available on the MyProcurement website. In addition, not all open tender results are available online. Most worrying is how the government continues to protect certain private parties by not willing to publish contracts such as the directly negotiated highway concessions for KIDEX, DASH, WCE, SUKE, SKIP and EKVE or even the tender documents for the incinerator project in Kepong on the basis that the concessionaire holder must be willing to allow the documents to be disclosed. The government should make DISCLOSURE a necessary condition as part of the tender process. All companies who are not willing to have the contracts publicly disclosed should not be allowed to participate in the tender process.

    Without these and other substantive reforms, the recent improvements in the CPI ranking and scores may prove to be temporary and not convincing to an already sceptical public.

    Finally, I call upon all elected representatives, NGOs and members of the public who care about fighting corruption to participate in Transparency International Malaysia’s “Walk Against Corruption” which takes place on the Saturday, 13th of December, at Taman Titiwangsa starting at 7am.[1]

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://transparency.org.my/media-and-publications/press-release/walk-against-corruption-on-saturday-13-december-2014/

  • Transparency is needed in the restructuring of MAS

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 28th of November 2014

    Transparency is needed in the restructuring of MAS

    A MAS which is healthy and profitable is important to our country because (i) it will be able to pay taxes and contribute to government’s budget (ii) it will be less of a financial liability to Khazanah, its largest shareholder, and increase the ability of Khazanah to pay more dividends to the government and (iii) it will provide steady and secure employment to its employees.

    The passing of the Malaysian Airline System Berhad (Administration) Bill 2014 or “MAS Bill” in Parliament yesterday is meant to help MAS restructure in order to put it on the road to profitability once again. This bill gives wide ranging powers to the Administrator of the new entity or “NewCo” that will replace Malaysian Airline Systems Berhad or MAS.

    In ensuring that the powers given to the Administrator and “Newco” are not abused, it is paramount that the following principles should be adhered to during the restructuring of MAS:

    (i)               Ensure transparency in the financial restructuring process

    Point 2 in Khazanah’s 12 point MAS Recovery Plan states that “where appropriate and necessary, MAS will examine options for financial restructuring and negotiation – including debt-equity swaps and debt term-outs.”[1] The MAS Bill gives wide powers to the Administrator to transfer property and liabilities belonging to MAS.

    It is acknowledged that financial restructuring of MAS is necessary given its borrowings of over RM11b. Since both the Prime Minister[2] as well as the Managing Director of Khazanah[3] have come out to say that the expected capital injection of RM6 billion into “NewCo” does not constitute a bailout, the terms of this financial restructuring has to be made public. For example, what will happen to MAS’ payments to the three companies that were set up to buy assets (planes and buildings) and then lease them (back) to MAS? The debts of these three companies – Assets Global Network Sdn Bhd (RM961m), Penerbangan Malaysia Berhad (RM5.8b) and Turus Pesawat Sdn Bhd (RM5.3b) – totalling up to RM12.1b are guaranteed by the government. Any changes to the payment terms of “NewCo” to these three companies would impact government finances and hence must be disclosed for the sake of transparency and to ensure that the promises of the Prime Minister and the MD of Khazanah are adhered to.

    (ii)              Ensure fair and transparent renegotiation of existing supply contracts

    The ability of “NewCo” to renegotiate existing supply contracts, especially those which are seem to be excessively costly, is provided for under Section 18 of the “MAS Bill”. In addition, Section 14, which was amended yesterday, is supposed to ensure that there are no disruptions to the services provided by MAS and its subsidiary companies. The fear expressed by some Pakatan MPs yesterday is that Section 14 will be used to preserve some of the existing supply contracts to MAS such as the RM6.25 billion 25 year catering contract given in 2003 to Brahim’s Airline Category (BAC) that is deemed by some to be overpriced.[4]

    To assuage such fears and to ensure transparency, any renegotiation of major supply contracts by “NewCo” must be publicly disclosed.

    (iii)            Ensure that the welfare and rights of MAS employees are protected

    The “MAS Bill” allows “NewCo” to be freed of any obligation to continue to hire existing MAS employees based on the same contractual terms. The new bill also exempts “NewCo” from being named as a party in any claim registered by current or former employees of MAS and its subsidiaries. Point 8 of Khazanah’s 12 point plan estimates a net reduction of 6,000 employees from the approximately 20,000 employees currently being employed by MAS.

    Khazanah must ensure transparency and fairness in the treatment of employees who will be employed by “NewCo” and also those who will be let go as a result of the recovery plan. Details of the “Employee Consultative Panel” (ECP) promised by Khazanah to ‘address employee-related concerns’ must be transparent to ensure that the welfare of the employees are protected. The details of the “Corporate Reskilling Center” which will be set up to address the ‘reskilling of appropriate MAS staff who do not migrate to “NewCo” must also be disclosed.

    The promise by the Managing Director of Khazanah to provide an update on the restructuring of MAS every three months is a move in the right direction and must be commended. We ask that the MD respond to the issues raised here in the next MAS update which will take place by the end of this week. [5]

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1] http://www.khazanah.com.my/docs/140829%20Khazanah%20announces%2012-point%20MAS%20Recovery%20Plan.pdf

    [2]http://www.thestar.com.my/News/Nation/2014/08/29/Najib-confident-MAS-turnaround/

    [3]http://english.astroawani.com/news/show/mas-recovery-plan-not-a-bailout-says-khazanah-42807

    [4] http://www2.nst.com.my/business/nation/catering-deal-eating-into-mas-profit-1.489221

    [5] http://www.themalaysianinsider.com/malaysia/article/update-on-mas-restructuring-by-sunday-says-khazanah-bernama

  • Port of Klang Authority (PKA) Chairman Tan Sri Kong Cho Ha must explain why the PKA decided to withdraw its RM720 million suit against KDSB over the PKFZ scandal

    Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 24th of November, 2014

    Port of Klang Authority (PKA) Chairman Tan Sri Kong Cho Ha must explain why the PKA decided to withdraw its RM720 million suit against KDSB over the PKFZ scandal

    It was reported today that the Port of Klang Authority (PKA) decided last Friday, on the 21st of November 2014, to drop one of its lawsuits against Kuala Dimensi Sdn Bhd (KDSB) regarding RM720 million in interest payments on the land bought from KDSB to develop the Port Klang Free Zone (PKFZ).[1]

    This shocking decision must be explained publicly by Tan Sri Kong Cho Ha, the newly appointed chairman of PKA, because of the involvement of taxpayer’s funds. PKA incurred a loss of RM201 million for the Financial Year 2013 and has accumulated losses of RM674 million since 2010. If not for the continued assistance of the Federal Government via a long term government loan at a low interest rate of 4% per annum and deferred interest payments until 2018, the ability of PKA to survive as a going concern would be very much in doubt, as stated by the Auditor General’s office in PKA’s 2013 Annual Report.

    If PKA was able to recoup some of the RM720 million in disputed interest payments from KDSB, it would help in decreasing the financial burden of PKA and allow it to pay back some of its long term debt to the government. Indeed, according to the PKA’s 2013 Annual Report, Rm1.82 billion was set aside as a contingent asset which it could claim back if the outstanding civil suits taken up against KDSB were successful. Even if not all of this RM1.82 billion could be claimed back, any portion would be helpful to strengthen the current financial position of PKA.

    The Ministry of Finance must also explain why its representative on the board – Datuk Dr Mohd Isa Hussain – was absent from the board meeting last Friday where the decision to drop the lawsuit was made. All current and future financial assistance and support given to PKA must ultimately come from the Ministry of Finance and to be absent when such an important decision is made is mind-boggling.

    Is this recent decision by the PKA board a pre-cursor to dropping the 2nd lawsuit by PKA against KDSB (and the architect – BTA Architect) to recover RM920 million in disputed charges over the development agreement to build PKFZ? Will PKA’s lawsuit against former PKA General Manager OC Phang for the breach of fiduciary duties also be dropped?

    With the acquittal of Tun Dr Ling Liong Sik and the withdrawal of 3 charges against Tan Sri Chan Kong Choy and now the dropping of the 1st lawsuit against KDSB, will we see a situation where all those involved in the PKFZ scandal are let off leaving only the taxpayer to pick up the bill?

    Dr. Ong Kian Ming
    Member of Parliament for Serdang

    [1]http://www.themalaysianinsider.com/malaysia/article/klang-port-drops-suit-against-developer-in-pkfz-case#sthash.yq2nAlU2.dpuf

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