Penang Port in peril?

Posted on July 23, 2012 by Tricia

Penang Port in peril?

Photograph: Ong Ee Lynn

The social costs involved in privatisation of public goods have been obvious since this lazy man’s method of nation building became the fashion in the 1980s. In Malaysia, despite huge losses to the public, privatisation continues, and under dubious and less-than-transparent conditions. Penang Port is up next. 

By Tricia Yeoh

(First published in Penang Monthly in the July 2012 issue).

The present controversy about Penang Port Sdn Bhd (Penang Port) saw for once members from both sides of the political divide come together in agreement. Penang Port is 100% owned by the Ministry of Finance, but the federal government Cabinet has recently made the decision to privatise it fully to Seaport Terminal, one of many logistical companies owned by the billionaire Syed Mokhtar Al-Bukhary.

The Penang state government has opposed this move, warning that businessman Syed Mokhtar would strip the port of its assets, including its seven cranes for shipment, to his Tanjung Pelepas Port (PTP) in Johor. This would in effect make the profitable Penang Port a feeder port to PTP. At the same time, Penang Barisan Nasional spokesperson Teng Chang Yeow has also cautioned against the move, urging the Cabinet to reconsider this option, whilst Member of Parliament Bung Mokhtar also condemned the plans (although he insinuated that he, too, would be the welcome recipient of such friendly contractual arrangements).

This disagreement to privatise the port is an interesting development, for several reasons. First, it highlights the growing awareness among the public of the failed privatisation processes in the country. Second, the issue brings into question the role that tycoon Syed Mokhtar has and continues to play in the Malaysian economy, through his private as well as public (government-linked) entities.

Let us first explore the issue of privatisation. In a market-driven economy, it is clear that the private sector contributes hugely to the economy through the growth of healthy businesses, the multiplier effects of foreign direct investment which have a direct impact on local job creation and industry development.

However, the government needs to ensure that the private sector exists under conditions that allow for a level playing field and healthy competition. Malaysia has now enacted a Competition Act, and established the Malaysian Competition Commission to enforce this in 2010. But this is a fairly recent affair, and there are also limitations within the Act itself. As a result, when the federal government talks incessantly about the importance of promoting the private sector, one must distinguish the difference between an environment for free and fair competition versus one in which only select key players are allowed to operate.

Malaysia has a great number of government-linked companies (GLCs), all of which are involved in major public sectors. In fact, Pemandu announced last year that plans were underway for the government to divest its shares in 33 GLCs, the proceeds of which would be channelled to an account meant to “service the country’s deficit, invest in existing funds and facilitate the government’s involvement in certain businesses”, although the latter reason given effectively renders the entire exercise futile.

The unfettered nexus between government and business that continues to flourish in Malaysia means that the government has deep links with the so-called free-moving “private sector” such that these private companies are basically operating with the government’s interests in mind.

The criticism of the privatisation model in Malaysia is therefore that it has in reality not conformed to the ideals of privatisation at all, but has grown to resemble an economy based on monopolies and oligopolies, in which small and medium enterprises have little say in the economy.

Some relevant examples come to mind immediately, for instance the water privatisation fiasco in Selangor (which my past columns in this magazine have elaborated on at length) in which public utilities are privatised to a concession holder under a lucrative contract for many years, oftentimes the actual cause of inefficient delivery and eventual bailout, pressuring the country’s fiscal position even further.

 

Photograph: Yam Phui Yee

This begs the second question then, on the concentration of national wealth to a select set of individuals. Syed Mokhtar controls a number of large public utilities such as power, water, ports, rail and toll businesses, as well as Proton. Listed as the seventh richest man in Malaysia, and 459th in the Forbes list of billionaires, he controls DRB-Hicom, the Malaysian Mining Corporation (MMC) and Tradewinds Malaysia Berhad, under which many other subsidiary companies operate. 

His interests are equally widespread within the state of Selangor. He has been reported to show an interest in acquiring a Yayasan Selangor building as part of the redevelopment in Jalan Bukit Bintang, and also owns a large stake in MMC-Gamuda, the joint venture company undertaking the first phase of the MRT project under a tunnel contract for the 51km Sungai Buloh-Kajang line.

Member of Parliament Tony Pua recently unveiled that despite his large empire, Syed Mokhtar’s group of companies has a combined debt of RM34.3bil or more than 10% of all local corporate bonds as of 2011 with only RM7.8bil cash as of May 2012. Two major problems arise – first, such a large concentration of wealth in the hands of one individual corroborates the growing income gap between the rich and the poor in the country. Eighty per cent of Malaysians earn an average of RM2,500 a month, and 60% of Malaysian households earn less than RM6,000 monthly.

The second issue is the risk posed on the Malaysian economy by the large debt accumulated by his businesses, a figure that would surely grow if and when this particular port deal actuates.

The anecdotes surrounding the present issue at hand, Penang Port, as well as other historical case studies where losses have been incurred such as Telekom Malaysia, DRB-Hicom, Star and Putra LRT, Tenaga Nasional, and Syabas in Selangor, amongst others, only lead Malaysians to ask questions about the bigger picture – how is the national economy being run, and for whose benefit?

It is as yet unclear whether the Cabinet will go ahead with the privatisation of Penang Port. In the meantime, however, other factors need to be considered. The Penang Chief Minister has stated that portions of land in the port actually belong to the state, led by the Pakatan Rakyat coalition. The Penang Port Commission on the other hand is led by Malaysian Chinese Association (MCA) president Datuk Seri Dr Chua Soi Lek.

There are bound to be disagreements as to how the port is to be treated in the near future. One issue is that of port dredging, which will increase the port’s effectiveness and efficiency, the responsibility for which is being pushed around and is at present not stated as a requirement under a contractual agreement with Seaport Terminal.

Criticisms against such a privatisation model are not new. It is unfortunate that this has to be repeated – the risk is undoubtedly high that when public entities are privatised, profits are privatised and costs are socialised. Any individual’s private debt should not in any way be translated into public debt, as this would be detrimental the welfare of future generations. In this instance, we can but hope that wise minds will prevail.

Posted in Economics, Federalism, General Politics | Leave a comment

Walking the narrow path

Posted on July 21, 2012 by Tricia

Walking the narrow path

(This was first published in Selangor Times, on the 20th July 2012).

I had the privilege of speaking to a group of young interns under the Otak-Otak Internship Programme this week. Otak-Otak recruits and places 50 interns in a range of corporations, think tanks, political parties and non-governmental organisations with the aim at building an alumni of young Malaysians who interact across sectors and are exposed to a range of experiences and training. It was, as usual, refreshing to speak to young minds ready to take on the world to explore avenues to create change in society.

This particular session was held at the headquarters of Parti Keadilan Rakyat, with other colleagues YB Nik Nazmi and YB Hannah Yeoh, where all three of us shared about our respective journeys into the field of politics and policymaking. What is unique about this platform is that we were all in our twenties when we were propelled relatively quickly into the serious and sometimes risky world of politics.

Throughout the evening’s dialogue, however, one question raised from the floor piqued my interest and I have continued to ponder over this issue. The person asking the question is currently employed by Pemandu, the arm under the Prime Minister’s Department tackling key areas of crime, corruption, education and so on.

The issue is this: that there are good people who genuinely want to work for change, but because of the way things are structured in the country, even positive efforts are often shot down in the ‘politicking’ of it all. One assumes she refers to the neutral officers within government who are regularly accused by the opposition of certain wrongdoings or agendas, and vice versa.

Let’s face it. It has become increasingly difficult to adopt a non-partisan approach to anything. Whatever position you take on an issue, be it book-banning or education reform, you are immediately compartmentalised into either being a pro- or anti-government supporter.

This has largely to do with the fact that politics has encroached into every corner of life as we know it. Every interaction an individual has on a daily basis – on the roads with poor traffic conditions, selecting the school of choice for your child, and so on – has a definite connection to a political motive that the decision-maker of that policy has chosen to push. Just think about our history textbooks, the Biro Tata Negara indoctrination course, the lucrative contracts of the toll concessionaires, and so on, and you’ll get the idea.

So, we have established that it is realistically impossible to escape the clutches of a political environment in Malaysia. But what of individuals who genuinely want to make a difference? What route can they take? What assurances can be made that they, too, will not be sucked into the very same ugly and mudslinging-type world they detested in the first place?

It is important to firstly establish that the system is structured such that any individuals being absorbed into it would unlikely be able to change things significantly unless they are privileged enough to be key decision makers. Unless you change the system, you continue to dance to the same tune as that set out for you.

So the next question is, how does one change the system and what is the most effective route of doing so? The easiest answer is political will. But then, are we saying that none of our current leaders have such political will? Or is it because the system is so structured that by its very nature it self-implodes whenever a leader initiates reform? For example, perhaps, the current Prime Minister’s inability to win over the hearts of his own party members in his reasonable attempts at correcting the lethargy of his administration?

Having read several pieces on transition in government, I am convinced that whenever there is new leadership, the changes must come about quickly and effectively for it to be taken seriously by all levels of government – right up to the rank and file civil service.

But back to the question of those individuals really pushing for change in whichever positions they occupy – be it within government or civil service or NGOs or as professionals – is it possible to perform their duties without becoming disillusioned by the backlash received?

First, any job taken up will have its risks and rewards. One must evaluate one against the other and calculate if it is worth the time. Second, the real challenge is getting systems to change, and so every effort must be made to initiate true reform such as passing laws that ensure the independence of the institutions that are meant to protect the safety and sanctity of citizens in a fair and just manner.

Finally, it takes great strength to put aside one’s differences in approaching an issue on a bi-partisan stand. Much respect is owed to politicians within both Barisan Nasional and Pakatan Rakyat who admit the flaws of their own coalition and are willing to reach across the divide to work on issues of common concern such as electoral reform, education policy and crime.

It is hoped that more Malaysians, young and old, will not shy away from challenging careers that may place them in positions of possible criticism. This comes with the job. And any real, meaningful vocation that has the potential to spark change in society must after all be accompanied by its equivalent obstacles. This should not be reason to give up one’s ideals – no, despite the setbacks, young Malaysians should always strive forward and occupy that space that is increasingly narrow. Cynicism is the worst possible enemy in such times.

Posted in General Politics, Personal, Reflections | Leave a comment

In the face of Injustice

Posted on July 14, 2012 by Tricia

In the face of Injustice

(A version of this was published in theSun on 13th July 2012).

Sometime last week, I attempted to get out of my lane whilst driving, turned on my indicator and stuck my nose out to move to the lane beside mine. The car behind braked suddenly, and the car behind crashed into him. Conventional traffic laws would state it is the fault of the car committing the accident as he was unable to stop in time and ought to have kept a safe distance anyway. However, after a two-hour negotiation, the last car demanded I pay RM1000 for his damages; I wanted to make a report at the police station which he refused to agree to.

I eventually paid a lower amount of RM400, as the person became more and more verbally aggressive, began hitting his car, and threatened to bang my car (in order to get my car insurance to pay for his damage), as well as get someone to “find” me if I did not pay up.

Throughout the negotiation, I felt intimidated and weak. At some point I felt guilty and that perhaps I should help contribute to the poor man’s repairs, perhaps due to his accusatory words. Upon reflection, it should have been brought to the police – this was a case of mild injustice that perhaps this institution could have helped address.

But surely any number of us would experience something similar on a daily basis, and feel angered whenever justice is not provided under those circumstances.

The 16th of July 2012 will mark the third death anniversary of the late Teoh Beng Hock, former political aide to the current Selangor government state executive councillor, Ean Yong. Interrogated as a witness at the Malaysian Anti-Corruption Commission’s (MACC) Selangor headquarters, his body was found on the roof of the 5th floor the day after, whilst he was in the care and custody of the MACC.

After a coroner’s inquest, and a subsequent Royal Commission of Inquiry, the case has come nowhere close to being resolved. On the government’s part at least, it is considered “case closed”, since the RCI concluded that he was driven to suicide as a result of “relentless, oppressive and unscrupulous” questioning by the MACC officers.

However, the three officers accused of having caused such trauma have not been charged under the Penal Code, and have instead been sent back to the MACC’s internal complaints committee to decide on some disciplinary action. (One of them has actually been promoted to head the MACC Negeri Sembilan office).

Over the last week or so, many events have taken place in commemoration of Teoh’s death anniversary, including and most uniquely, a play conducted completely in Malay by a group of young actors, Rumah Anak Teater. Held in the atmospheric settings of Kuala Lumpur Performing Arts Centre in Sentul, the play attracted a multi-ethnic group of young and old.

The play attracted a younger crowd that may not have been entirely familiar with the Teoh Beng Hock case previously. It also drove the point home that this was not necessarily a “Chinese” issue, but one that was relevant to all Malaysians, regardless of race, age or socio-economic disposition.

The riveting scene in which he falls from a height was done superbly in the play. I was particularly curious to see how the director would depict the moment of the “fall” – whether it would concur with the RCI’s findings of a suicide, or otherwise.

This scene presents three MACC officers crowding around the person acting as the persona of Teoh, and amidst some rough-handling and scuffling, he falls to his death. There were three possible options for Teoh’s death from the window of the 14th floor: suicide, intentional pushing, or an accidental ‘letting go’. The play does an excellent job of leaving the conclusion up to the audience to determine for themselves what truly happened at the end.

There are injustices that surround us constantly, and we scream righteous anger when we are wronged – in our personal and professional lives. But things change dramatically when a life – or worse, a death – is involved. Where in my car situation, I wanted desperately to turn to the higher authority of the police, in this case Teoh was already under the care of a higher authority that ought have exercised its due care and responsibility over him.

Numerous financial scandals have been brought to light this year. Making accusations for political mileage is to be expected, but should not be the real reason the rest of us must care and be concerned. Neither should we feel disgruntled in order that we, too, should get a share of the cake. In the final analysis, Malaysians should expect conditions, laws, and institutions that provide for a fair and just society, not a system that intimidates and acts as aggressor. If these institutions fail us too, then it is time for some serious reform.

Posted in Human Rights, Personal, Reflections | Leave a comment

Better Police Deployment

Posted on June 30, 2012 by Tricia

Better Police Deployment

(A version of this was published in theSun on 29th June 2012).

My previous column on the increasing crime rate proposed that the management of crime should be decentralised. The Royal Malaysian Police responded to this piece with an eight-page letter. This is the sort of discourse with public officials and institutions that the Malaysian public have long been waiting for. It is hoped that such interaction and meaningful exchange of ideas will continue, especially given last week’s incident in which a woman was robbed and slashed at a shopping centre carpark.

In his reply, the Assistant Head of Bukit Aman’s Public Relations IGP Secretariat listed the efforts that have been implemented to curb crime. He also stated that the crime rate has actually been decreasing, implying it is only a matter of perception. In this regard, it would be useful for the police and Pemandu to release not just national or state crime figures, but broken down by districts as well, and tracked over a period of time. This would help citizens to get involved in crime prevention in their own localities.

But crime statistics can only get you so far, because not all crimes are reported. This is partly to do with the lack of trust in a system they believe no longer works.

A more useful issue to tackle is that of deployment. The Royal Commission to Enhance the Operation and Management of the Royal Malaysian Police in 2005 recommended a total of 17,902 police officers should be redeployed to the front line, whereas a Parliamentary reply in October 2011 stated that only 7402 such police have been deployed.

In their reply to me, the police stated that it is not accurate to take only those in the CID division as being involved in combating crime, and that in fact more than 90 percent of personnel within Management and Logistics, Internal Security and Public Order, Narcotics and Commercial Crime Departments amongst others are also involved in crime prevention.

However, these officers may not necessarily have been given the appropriate police training for crime prevention and investigation skills. Under their respective departments, a traffic police would receive training on traffic regulations, whilst a commercial investigating officer would receive business, administration and cyber operations training.

Whilst it is encouraging to note that other officers are being redirected to tackle crime, one wonders if their duties and capabilities are being appropriately matched. The sort of crime that citizens are fearful of is crime on the streets, and so it would only be meaningful if they are reassigned as criminal investigating officers to best tackle such crimes.

This also begs the question of the disproportionate number of police officers within departments such as the Special Branch, Management and Logistics Departments, as well as the Pasukan Gerakan Am, the latter arm of which is used when controlling street demonstrations. The Special Branch, for example, has almost the same budget allocated for personnel as the CID does, 7.44 percent and 7.64 percent respectively. In addition, over a third of police funding goes to Internal Security. Are police resources being appropriately allocated to the divisions that actually tackle crime?

This brings me to the issue of decentralisation. The police’s response to me stated that centralisation is the best way to tackle “terrorism and other threats to internal security”. One traces the historical roots of this emphasis to the days of fighting communism and guerrilas in the jungle. But such counter-insurgency efforts are no longer a primary concern. The divisions dealing with these could be better deployed to crime prevention.

In fact, the police states that our current force is “effectively decentralised at state level, and into district and station levels”. This is not the sort of decentralisation I referred to. What I meant was more empowered state and local governments that can determine the best crime-prevention methods which are most effective in their areas, and given the jurisdiction to do so instead of relying on directives from a singular authority. What works in Gombak may not work in Bandar Utama.

They also cited other countries like the UK and US that have adopted decentralised police forces, which still maintain a centralised force. This is precisely my point – nobody is saying the centralised police unit need be dismantled – but that crime prevention can be better and more efficiently managed with the additional personnel at ground level.

The argument that they make on easier logistical co-ordination of a centralised police force is irrelevant. If the current system is not proving sufficiently worthy, any amount of logistical headaches are worth the effort for the sake of improving people’s lives. Secondly, the Home Ministry has been successful in raising nearly 3 million RELA (People’s Volunteer Corps) members and co-ordinating them.

Finally, it is noted that the police currently targets crime hotspots, which it also uses to measure its success rates. However, it may be more useful to identify white, grey and black areas in crime, a method used in combating the communist insurgency. In the long run, this would require decentralising crime management in order to make it work.

More and more Malaysians – those who can afford it, that is – are choosing to live in gated communities or condominiums, where they pay monthly charges for private security. Citizens should not have to pay for private security if the police forces are able to provide them the security they require.

We have to ultimately go back to the question of political responsibility and accountability. As long as there is disproportionate police financing, with greater weight given to, say, political monitoring as opposed to combating street crime, this does the police force a disfavour. It is hoped that this proposal of evaluating police allocation of financial resources, as well as police deployment, will be so noted by the policymakers.

Posted in Crime, Public Administration | Leave a comment

A tale of two water supply systems

Posted on June 28, 2012 by Tricia

A tale of two water supply systems

The Teluk Bahang Dam in Penang.
Photograph: Daniel Lim

By Tricia Yeoh 

(First published in Penang Monthly in the June 2012 issue).

In the days before the world’s governments went mad about privatisation, supplying utilities such as water or electricity was the main raison d’être for government and for government taxation. Those simple days are gone, and especially in Selangor, people certainly wish they would come back. But there is no way back.

The issue of water has re-emerged in the state of Selangor. Peter Chin, Minister of Energy, Green Technology and Water, recently issued a statement saying his hands are tied and there is nothing the federal government can do to expedite the restructuring of the water industry in Selangor, which has reached a stalemate after more than three years of negotiations. This crisis has in the past been contrasted to the Penang state government’s successful water deal. Prime Minister Najib Razak had at the time called on other Pakatan Rakyat (Pakatan) state governments to follow Penang’s example.

It is worth examining the two states’ water industries when making such a comparison. Suffice to say at the outset that both states are very different in their respective water industries’ formation and current situation. Making generalised comparisons therefore makes little sense.

In the Penang water deal, the government transferred RM655.2mil worth of water-related assets (or 50% of the total) to Pengurusan Aset Air Bhd (Paab) in exchange for a restructuring of the state’s outstanding loans into a grant. Under the arrangement, the assets would be leased back to the state for 45 years for an annual fee of RM14.56mil. The Penang government would retain control over any future revision in water tariffs in the state, whilst the state would be given a further grant of RM1.2bil for the expansion project of the Mengkuang Dam. All in all, the arrangement seemed to benefit the Penang government and there would have been no reason to disagree.

Now, the Penang water industry, even before the restructuring took place, was already in the hands of a very capable corporatised body, the Perbadanan Bekalan Air Pulau Pinang (PBAPP). Note that this one body was – and still is – operating the industry in a holistic manner, conceptualising the entire water chain from upstream to downstream; from treating raw water all the way to distributing water to consumers. This is a key point to note. One particular indicator of its achievements is its having been able to maintain non-revenue water (NRW) rates at one of the lowest in the country, as low as 16% at one point.

The water restructuring deal was easier to manage and negotiate, since there was only, after all, one body to hold discussions with. The Selangor situation was a completely different kettle of fish, as the following paragraphs serve to tell.

The Selangor water services were originally run by Jabatan Bekalan Air Selangor (JBAS). This changed when the treatment portion of water was privatised to three companies: Puncak Niaga Sdn Bhd (Puncak Niaga), Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) and Konsortium Abass Sdn Bhd (Abass). The loss-making arm of water distribution was corporatised into Perbadanan Urus Air Selangor (Puas). But because it continued to make tremendous losses, it was privatised into Syarikat Bekalan Air Selangor (Syabas) in 2005 to ensure a sustainable water industry.

In 2009, when the water restructuring exercise began, the Selangor water industry was operated by four separate private concession holders. This was a very fractured situation to begin with, and consolidating the four companies was an uphill task to say the least.

The restructuring in Selangor began with the same intention as that in Penang, namely for the water-related state assets to be transferred to Paab and leased back to the entity that would operate these assets at a reasonably low rate. This new entity was initially planned to be a state government-run body, operating water as a complete service from treatment to distribution, exactly in the way PBABB manages water in Penang.

 

Photograph: Kwong Wah Yit Poh

What is important to note is that Selangor had to undergo the first step of buying over the four companies, and then form a holistic state-run entity (either entirely state-owned or corporatised), for it to even arrive at the status PBABB was at prior to the latter’s restructuring. And it has struggled over the past three years and more to do just that. 

In fact, there have been multiple offers made by the Selangor government (first, jointly with the federal government and then independently thereafter) to buy over the assets and equity of the four concession companies (Puncak Niaga, Abass, Splash and Syabas) but to little avail. Half of them claimed the offers were not lucrative enough.

Although it is true that such private contracts should typically not be reneged upon (their concessions last up to 25 or 30 years) – where one argument was that terminating contracts would reflect poorly on the rule of law in the country and recognition of all other private contracts – this instance should be considered an exception. First, the exercise was started by the federal government’s enactment of the Water Services Industry Act 2006 (WSIA) in the very first place, after the then-Minister of Water Lim Keng Yaik recognised the gross inefficiencies of the privatised arrangement.

Second, the concession agreement signed with Syabas was poorly designed, to the detriment of consumer interests, where tariff rates were allowed to be increased by up to 37% in 2009, a further 25% in 2012, 20% in 2015, 10% in 2018 and five per cent every three years until 2030. During the many negotiations, one concession holder, Splash, even counter-offered a deal to take over the entire industry and claimed to be able to sustain the industry and still reduce water tariffs by five per cent immediately.

Finally, the WSIA is an extremely powerful piece of legislation which does allow for the Minister of Energy, Green Technology and Water to make certain policy decisions he deems appropriate and in the national interest. There are occasions in which policymakers with the authority to exercise their decisions must be called upon, and this is the time to do so – especially given the fact that any further delay causes increasing damage to the current situation.

Various quarters have in fact sidetracked the issue by accusing the Selangor government of politicising another water-related project altogether, namely the construction of the Langat 2 treatment plant, which is part of the Pahang-Selangor Raw Water Transfer Project.

It is important that the stakeholders fix their eyes on the top priority, which is to ensure the water industry restructuring is settled once and for all, and according to the original objectives of the Parliament-sanctioned WSIA.

Finally, to compare the water situation in Selangor and Penang is good insofar as seeing Penang’s PBABB as an ideal to copy. However, this has not been possible given that Selangor is still one huge step behind—the four private companies have not been able to agree on a fair price. It seems likely that all parties are merely waiting for the 13th General Election to take place, before they seriously act to solve the problems.

Posted in Corruption, Economics, General Politics, Selangor, Water | Leave a comment

Decentralisation the way forward?

Posted on June 16, 2012 by Tricia

Decentralisation the way forward?

(First published in Selangor Times, on 15th June 2012).

At the launch of my book, “States of Reform: Governing Selangor and Penang” last Saturday, three esteemed panelists YB Liew Chin Tong (Member of Parliament, Bukit Bendera), YB Nik Nazmi (State assemblyman, Seri Setia) and Dr. Ooi Kee Beng (Deputy Director, Institute of Southeast Asian Studies, Singapore) took on the increasingly popular but also controversial subject of decentralisation of government in Malaysia. The session was graciously moderated by Fuad Rahmat, Research Fellow at the Islamic Renaissance Front. It was an honour to have each of them present at the launch.

After the event, I asked friends, relatives and colleagues who attended how they felt about the forum’s discussion. Those present were either highly enthusiastic over the contents of the session, stating it was an honest reflection of the current state of politics in the country, whilst others felt speakers were too technical and spoke in jargon not easily understood. Perhaps it is true those within the public policy circle tend to use a language, accompanied with specific terms, that many are not familiar with.

This does not mean the issues themselves should not be spoken of, or discussed. On the converse, those with the advantage of access to information, and sufficient time to interpret and decipher such information, are armed with the responsibility of translating these messages to peers and colleagues.

Take decentralisation for example, which in the context of today’s government and politics, simply refers to the act of releasing control from the central government, and passing this on to the lower levels of government. There are three tiers of government in the country, namely the central, or federal government; state governments; and local government. In Malaysia, people are elected into government only within the first and second layers, whereas those in the third layer are appointed.

In a time when policy and political competition is at its peak, just prior to the 13th General Election, it is almost impossible to make comparisons between the two political coalitions the Barisan Nasional (Barisan) and Pakatan Rakyat (Pakatan), precisely because of the nature of a centralised government in the country. In South Africa, for example, state governments have control over education policy within their respective states. This then allows citizens within that particular state to make comparisons with the previous state government on things that matter, and are real to them on a daily basis.

The recent move by the Higher Education Minister, for example, for initially attempting to withdraw all PTPTN (higher education student fund) loans from students at Universiti Selangor (Unisel), is a perfect example of how a highly centralised government currently makes decisions all on its own for students living, and studying in, a state university. Although they eventually backtracked, this example goes to show the magnitude of power concentrated in a single entity, which then governs all states across the country.

In an ideal world, decentralisation would therefore allow us as voters to pick and choose from a host of different political parties based on their accomplishments in their different state, or local governments. Just as how libertarians take pride in their utopian world where there is perfect choice in a free market system, likewise such market-based policies would allow for perfect competition amongst voters who are armed with perfect knowledge of the options available to them.

Or so in theory. Despite my personal advocacy for decentralisation, I recognise the challenges that would be faced were this system to be adopted without simultaneous measures being executed. This is what one of the panelists, Liew, referred to when his condition for decentralisation was that democratisation should take place concurrently.

Meaning that there ought to be full efforts made towards ensuring a free and fair society – a free and independent media, a strong civil society, an independent civil service, and the many other fundamental freedoms many have pushed for in the past. Without these institutions being put into place, it would be fairly difficult to ensure a level playing field despite a more equal distribution of powers between federal and state governments.

One of the interesting questions from the floor was to what extent should we push for decentralisation? Which are the areas which ought to be devolved from the central administration, and distributed to the lower tiers of government? One could possibly begin with the areas which were formerly of the states to begin with, such as water treatment and distribution, and solid waste management. The reason the federal govenrment has given for “centralising” these functions is that they can be better and more efficiently managed given financial support comes from them.

The real reason, however, in these two instances, is that these functions have been privatised under lucrative concessions to private companies. Thus, when centralisation of power takes place, it is only inevitable that there exists a centralisation of decision-making (and contract-selecting) as well. Although decentralisation may also incur a ‘decentralisation of corruption’, with the emergence of new local warlords, these problems might just be easier to solve than dealing with large corporations given mega-projects of contracts to handle, which is presently the case.

We are a long way indeed from anywhere near a decentralised government. But we were not always this centralised. And we are, on paper at least, a federalism. Other federated countries like Australia would be a good case study to learn from, in terms of financial and operational separation of functions. In all of this, however, it requires political will from both sides, where right now there is insufficient incentive from the incumbent Barisan coalition to want to give up anything, least of all power and control.

Tricia Yeoh is author of “States of Reform: Governing Selangor and Penang”. The book is available at bookstores nationwide, at RM28. 

Posted in Federalism, General Politics, Public Administration | Leave a comment

Decentralise Crime Management

Posted on June 16, 2012 by Tricia

Decentralise Crime Management 

(A version of this first appeared in theSun on 15th June 2012).

A recent spate of events have left urban dwellers reeling and fearing for their safety and those of their loved ones. A woman was reported to have been kidnapped in her own car at the basement carpark at the Curve, a popular shopping mall. Not long after, two women were allegedly robbed of RM80,000 also in the same vicinity. And most recently, Bersih 2.0 committee member Wong Chin Huat was beaten up by five men whilst he was jogging, presumably unrelated to any political motive.

Home Minister Hishamuddin Hussein has responded, saying that any perceived increase in the crime rate is only a matter of perception, and alluded to the fact that these highlighted cases were merely isolated incidents. Whilst it is true that one-off crime cases are usually sensationalised (because we shudder to think of what would happen to ourselves in such situations), no authority should make light of crime.

Nevertheless, judging from the Reducing Crime National Key Results Area Report 2011, Malaysia’s crime rates have fallen significantly. Based on the report, there has been a 39.7% drop in street crime and a 11.1% drop in index crime. In addition, Malaysia was ranked as the 4th safest country in the Asia Pacific region, and the most peaceful in Southeast Asia, by the Global Peace Index (GPI).

How exactly does the index crime work? Index crime refers to crimes that are reported with sufficient regularity and with sufficient significance to be meaningful as an index to the crime situation. ‘Sufficient regularity’ would be offences that occur commonly or regularly, where for example kidnapping through a distressing offence is not considered common and is therefore not factored into the index.

On the other hand, snatch theft although small in gravity is included. An occurrence is considered a crime when it is reported either by the victim, witness or on the initiative of the police upon discovery of such criminal activity. The index crime is divided into two categories, namely violent crime (murder, gang robbery, rape and so on), and property crime (housebreaking, theft, among other sub-categories). (Source: Crime and Safety Policy Factsheet, Centre for Public Policy Studies, 2008).

Although statistics is often a good indicator of national trends, the police also acknowledge the existence of dark figures, which represents unreported crime in the country. So when any official document is released, of course one has to take these figures with a pinch of salt, as there will always be a gap between reported and unreported crime.

The police force has borne the brunt of the criticism, with allegations that they are not doing enough to fight crime. The truth is that the police officers are also subject to the system under which they work. Think tank REFSA highlights that there are only 9,335 or 9% of the 106,079 police personnel in the Crime Investigations Department (CID), and 4,184 or 4% in the Narcotic and Special Task Force. In the meantime, 53,323 or 51% are located in the management and logistic units, with 5,102 in the special branch and 14,551 in the General Operations Force (formerly to combat communist insurgents in the jungle). (Source: REFSA Focus Paper, 2011).

At the launch of my book “States of Reform: Governing Selangor and Penang” last weekend, the discussion steered toward the issue of decentralisation. One idea that emerged was the possibility of decentralising security forces. The responsibility of combating crime is presently vested completely within the central police force, as well as more recently, RELA officers (People’s Volunteer Corps), which is also centrally controlled.

Local and community-level players could for example be given some liberty to ensure safety and security on the streets, and in other areas where the police are unable to cover due to insufficient personnel. However, when the Petaling Jaya City Council (MBPJ) attempted to form its own auxiliary police force, this was rejected by the federal government.

Although this may take some logistical co-ordination, the government must realise there can be mutual ground upon which both political sides can agree to work on together. Especially in instances of life and death, quite literally.

Many an e-mail has been circulated of late, informing wives, daughters, children, of what to do under circumstances of a potential rape, kidnapping or otherwise. Although it is sometimes useful to refer to reports and statistical graphs that show a glowing reduction in crime, it might be more effective to consider out-of-the-box ways of managing crime.

Allow state and local governments to tackle crime in local constituencies. And the private sector can chip in too, by adopting selected neighbourhoods, sponsoring areas and working with local councils to deploy additional security officers to patrol the area by day and night. The police has started a mydistress.net website for those with smart phones to alert the police in times of emergency, and this should be lauded. We ought to employ any innovative means at our disposal to ensure our own people feel safe – at home, when driving, and out on the move. This is one issue I believe is bipartisan enough for the federal government to consider relenting a little of its control over.

Posted in Crime, Public Administration | Leave a comment

Seeds of Reform

Posted on June 2, 2012 by Tricia

Seeds of Reform

(A version of this was published in theSun on 1st June 2012).

Politics creeps into our lives like a steady, stealthy creature, and before you know it, it envelops you. This is a matter of fact – it encompasses almost every aspect of daily living, since having decent public services, education, healthcare, a safe and clean environment, and an efficient public transportation system are dependent upon the policymakers at the different tiers of decision-making levels.

And so it is that all Malaysians concerned about their or their families’ livelihoods must inadvertently be interested in political development, if not necessarily playing an active or direct participatory role in it. To care about yourself and your loved ones means being alert as to the changes taking place in your surroundings.

Over the past four years, Malaysia has undergone significant changes, much of which one could possibly attribute to the general elections of 8th March 2008. In short, the event in which the Barisan Nasional lost two-thirds of its majority at the national Parliament, as well as ceding defeat to its Pakatan Rakyat opponents in five of the 13 states, was merely the catalyst which sprung about tremendous shifts in the way policies and politics run in this country.

Of course there were moments where politicians reacted violently to this sudden change in the air – one can count the number of incidents involving explicit videos or photos, playing dirty through all sorts of underhanded tactics, false accusations, innumerable court cases, civil suits, peaceful as well as ugly demonstrations, and the sum total of which probably reduced national productivity (in real terms) somewhat. The response of many Malaysians to these incidents is: “Too much politics these days.”

And yet, despite the frustration which many express, it has also been a period of great reflection. Oftentimes even the most basic of concepts, beliefs and ideas require some deconstruction before having them rebuilt again, and yet again. And to go back to square one in re-conceiving national identity, together with its hopes and fears, is not always a bad thing.

For example, the very idea of how government works has altered, where both sides of the political divide are now clamouring to ensure they obtain public participation as far as possible in their projects and programmes. Although not all of these may be effective for now, such attempts at reaching out to the public ought to be considered a direct effect of the political tsunami of 2008. If political competition is what is needed for society’s needs to be eventually met, then so be it – this is the marketplace of political ideas, thoughts, programmes and projects.

The future of the country rests with the ability to produce fresh, new ideas that are executed well. Easier said than done, one may imagine, but this is also true – that the new state governments under Pakatan Rakyat also offered an alternative way of running administrations. Malaysians were able to look at how the governments of Selangor, Penang, Kedah and Kelantan were running the show, to see a different way of doing things.

Selangor and Penang in particular have been interesting case studies to observe, since they are the two of the most urban states in the country, the combined economies of which contribute significantly to the country’s total GDP. In addition, Selangor, Penang, Kedah and Kelantan states accounted for 53 percent of all investment in Malaysia (domestic and foreign) in 2010.

The two states of Selangor and Penang introduced some good measures, such as the “No Plastic Bag Day Campaign”, Freedom of Information legislation, and have pushed for Local Government Elections, amongst others. It is curious to see if other state governments, or perhaps the federal government, might also follow suit in taking up such initiatives which are, ultimately, beneficial to the public.

Likewise, the federal government responded to the 2008 polls by (amongst others) setting up its special Pemandu (Performance Management and Delivery Unit) taskforce to tackle specific problems facing the country including public transport, corruption, crime and education. There is still much to be done, especially in terms of developing democracy, local empowerment, and of course electoral reforms (the topic of much debate today).

It may feel like things are messy, but this is how a democracy often works. We must be willing to speak about things that are not functioning in order to improve them. Opposition exists only because of the dissatisfaction that Malaysia has the potential to be a great country, and the deep desire for this to come to fruition.

It is my belief that the healthy competition between state governments, and between state and federal government (inter-coalition), must continue in order to present policy and governance alternatives to the voting public. Coupled with a growing public awareness, one hopes that a day will come where these seeds of reform will take full shape and people are conscious about the policies they want, vote for, and expect to obtain. Until then, we have to bear with petty and crass acts of bullying and buttocks alike.

Tricia Yeoh’s book, “States of Reform: Governing Selangor and Penang”, will be launched at 10am on Saturday, 9th June, at the Central Market Annexe. The launch will be officiated by the Selangor Menteri Besar, YAB Tan Sri Abdul Khalid Ibrahim.

Posted in Elections, General Politics, Selangor, The Cause | Leave a comment

Political Waters

Posted on May 19, 2012 by Tricia

Water in Selangor is a pet subject, and fellow columnist Azman Ujang and I have had quite a number of opposing pieces in theSun. This one was published in theSun on 18th May 2012.

Political Waters

Fellow columnist at theSun, Azman Ujang, wrote earlier this week that the Selangor government is politicising water by not approving the Langat 2 treatment plant. He was referring to the Pahang-Selangor water transfer project which aims to transport water from Pahang to Selangor.

In his article, he says the pipeline would cost RM3.94 billion. In reality, the project involves more than just the pipeline. It also includes the construction of the Kelau Dam, and Langat 2 water treatment plant. When considered together, the project cost comes up to RM9 billion in total (17th August 2011, New Straits Times).

“Water Crisis”?

The main premise of his piece rests on the speculation of a “looming water crisis” in the state of Selangor, and he quotes Prime Minister Datuk Seri Najib Razak as saying that “Selangor’s water reserves are at 2.4%, way below the ideal level of 20%.” (15th May 2012, theSun).

It is unclear where these figures are obtained from. In fact, a quick check at the Selangor Water Management Board’s website (www.luas.gov.my) which monitors water resources in the state shows that reservoir levels in March 2012 are actually more than sufficient and way above critical water levels in six of the seven dams located in Selangor, Klang and Langat. Charts also show healthy and steady rainfall rates in Selangor.

Second, the major area of water loss actually comes from “non-revenue water” (NRW) which refers to water lost as a result of pipe leakages and unbilled water. Under the concession agreement signed with private operator Syabas, they are obliged to fulfill their responsibility to reduce NRW in Selangor. However, the National Water Services Commission (SPAN) reports that Syabas is struggling to bring the NRW below the 30% target. This is the commitment that they signed up for when sealed the deal with the state government and federal government.

Syabas is reported to have sent data to the state government, showing that the state is facing critical water shortages. Since many of us are not privy to such information, it would be good for them to release the data publicly so independent water engineers and consultants could evaluate the situation as well.

Pahang-Selangor Water Transfer Project

The Pahang-Selangor Water Transfer Project was first proposed as a result of the National Water Resources Study 2000, commissioned by the Economic Planning Unit, and carried out by three infrastructure-related consultants. This Study seems to have grossly over-estimated future water demand in Selangor, which for example predicted consumption at 500 to 1224 LCD (litres per capita per day) in 2010 but in reality Selangor’s domestic water usage was only 235 LCD in 2009.

To decide on such a large-scale project based on inaccurate projections must surely have been an oversight.

Since the project’s inception, several water-related NGOs have called for the project to be reconsidered for a number of reasons. First, that other alternatives had not been exhausted when looking at ways of ensuring consumers in Selangor and Kuala Lumpur are not deprived of clean water. This includes implementing a water demand management strategy, that aims to manage and reduce consumers’ use of water rather than endlessly increasing its supply.

Other solutions that could have been relentlessly pursued are upgrading existing plants so they can operate at full design capacity, which if carried out efficiently could be ready before 2014, as well as investing in water conservation through rainwater harvesting and recycling of water.

Further, others have also pointed out that the Pahang-Selangor Water Transfer Project would cost many Orang Asli families their traditional livelihood, since they occupy lands that would be flooded by the Kelau Dam. There are also possible ecosystem implications resulting from this project’s massive inter-state construction, which must be explored.

The Real McCoy

It is ironic that some have called on parties to stop politicising the Langat 2 deal. In fact, the real issue has been conveniently waylaid, that is the restructuring of the water industry in Selangor. In short, the federal government’s intention was to consolidate the fragmented water industry in Selangor (there are currently 4 private operators). However, two out of the four rejected the state government’s offer to buy over their companies, claiming the offers were not high enough.

Before any further decision can be made on water-related developments in the state, it seems clear that the first hurdle must be passed. That is, to ensure the water industry’s current state of limbo is resolved quickly. This is something the federal government through its ministry and water commission can expedite, since its role as policymaker is to monitor the situation and push for efficient outcomes.

Together with the state government, some bi-partisan co-operation is needed to seek a solution for the water industry: not just on the Langat 2 treatment plant, just one fragment of the larger equation, which is to settle the water industry’s future in Selangor, Kuala Lumpur and Putrajaya by returning to the original aims of the restructuring exercise.

Posted in Corruption, Economics, Selangor, Water | Leave a comment

Wading through the so-called “Water Crisis”

Posted on May 10, 2012 by Tricia

The BN government has been using the “water crisis” to spark fears in Selangor. This has been raised time and again, so it’s important to remember the real reasons behind its claim. This was first published in Selangor Times, in May 2012.

Wading through the so-called “Water Crisis”

Election fever is in the air, and the games have begun. Last month, Prime Minister Najib Abdul Razak stated that Selangor was heading towards a water crisis, after the state government blocked the building of the Langat 2 water treatment plant. He also said that this issue “should not have been politicised”, even though the state and federal governments are led by different parties. He also asked how Selangor could become a developed state if the people’s water supply was constantly disrupted.

There are several accusations and assumptions made in these statements which ought to be carefully considered by those of us living (and voting) in Selangor.

First, it is important to elaborate on the current situation of the state’s water industry which sets the context for the Prime Minister’s statements. The water operations in Selangor is fragmented into four different companies, that is three companies that treat raw water, and one company that takes this treated water and distributes it to the some 5 million consumers in Selangor, Kuala Lumpur and Putrajaya.

Along with other states, Selangor’s water industry was to have been restructured into a holistic entity which would streamline all parts of the operation into one body. This ensures the losses borne by water distribution (the more expensive, and less profitable, part of water operations) would be more than compensated for by water treatment (the less expensive, and hence more profitable, part of water operations).

This water restructuring has reached a stalemate after more than three years of negotiation between the Selangor state government, the water companies and the Federal government. The main issue is the unwillingness of some water companies to accept the offer of the state. These are companies alleged to be hostile to the Pakatan Rakyat as they were selected during the previous Barisan Nasional government’s time in power.

Running parallel to this increasingly hostile negotiation process (which eventually broke down) was the dispute over the Langat 2 water treatment plant approval. The previous Barisan Selangor government signed an agreement in which it would buy raw water from the Pahang government, which would include the construction of a massive pipeline between the two states, a dam, and a water treatment plant.

The current Selangor government has stated its position that it is unnecessary to construct these massive structures to transfer water from Pahang, for several reasons, namely that Selangor has sufficient water supply through its water resources (rainfall, lakes, rivers) as well as the fact that a better way is to ensure water is not wasted. Reducing non-revenue water (NRW), which is water that is lost through leaked pipes, or stolen, would also make up additional water resources for the state’s consumers. Finally, conserving water through means such as rainfall harvesting and recycling water would be more ideal. These are better solutions than indulging in mega-projects, beneficiaries of which would be, ultimately, construction companies engaged for the projects.

The Prime Minister’s second accusation is that such an issue should not be politicised, which is a little bit of a joke since practically everything has become political fodder these days. In the case of water, ideally both governments should have come to the negotiating table in the interest of consumers’ needs. This is one instance in which a bi-partisan stand and solution would have worked out well.

However, it is ironic that despite the state government’s intention of resolving the water restructuring stalemate by ensuring a holistic, and therefore more efficient, model is accomplished, the Federal government that initiated the process in the first place has remained silent on the issue.

Finally, water disruption is simply a reflection of poor water services. The water distribution company in Selangor, Syabas, is a case in point. Their side of the argument is this: that they have insufficient capital expenditure required to make pipe replacements and hence the quality of water – and water services – is deteriorating.

This really just emphasises the point that water privatisation in Selangor has not been successful. If a private entity that was given a long-term concession to carry out water operations, and granted substantial loans and grants, is unable to deliver its services well, then this marks failure for that private entity.

Privatisation if done efficiently, fairly and transparently, is justified. The Selangor case is not an example of such privatisation.

The solution to this messy situation is for the issue to be tackled head-on by both the Federal and state governments in seeking resolution. However, it is now increasingly unlikely that any headway will be gained, since all parties involved are most likely waiting for the General Elections itself, results of which would impact upon the decision on both water restructuring and the water treatment plant.

Whichever political coalition it is that eventually runs Selangor, it is hoped that they would choose wisely which approach to take on water resources. Yes, it is true that water disruption is not pleasant. It is true that it ought not to be politicised. However, it is important to examine what are the root causes for these problems in the first instance.

Finally, the worse crisis is one in which politically-connected private sector players continue to reap financial benefits at the expense of the consumers they are expected to serve.

Posted in Corruption, Economics, Selangor, Water | Leave a comment