Monthly Archives: September 2016

9 posts

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.

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







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