MCA didn't profit from TAR UC hostels

Like a broken record, DAP continues to nitpick at MCA’s pride and legacy – the Tunku Abdul Rahman University College.

And this time the Keranji assemblyperson Chong Zhemin is scraping the bottom of the barrel by alleging that MCA has been profiteering from TAR UC via Delta Pride (M) Sdn Bhd, the company holding the 30-year Build, Operate and Transfer (BOT) contract to build and manage student hostels for the TAR UC Kuala Lumpur campus.

Chong alleged that the company has been paying out director remuneration amounting to RM204,000 and that the company also has retained earnings of RM11.42 million for the year 2018. And based on these facts, he surmised and deduced that this is proof that the company is benefiting MCA financially.

Like the famous quote by F Scott Fitzgerald, “There is no confusion like the confusion of a simple mind.” The following are the facts:

1. The proposal to build hostels was mooted by the Federation of Tunku Abdul Rahman College Alumni Associations Malaysia.
   
   As previously explained, MCA only came into the picture after the listed property company previously awarded the contract went into financial difficulties during the 1997 Asian Financial Crisis.
   
2. As a result, MCA was duty-bound to take over the concession, including the extended loans and it built the hostels via Delta Pride.
   
3. The parent company then extended interest-free shareholder advances amounting to RM16 million to Delta Pride in 1998 to take over the project and to complete the construction of the hostels.
   
4. Delta Pride only managed to complete its repayments two years ago, back in 2016 – benefitting from a full 18 years of interest-free advancement.
   
5. If MCA were to put this RM16 million into an interest-bearing account of just four percent per annum instead, come 18 years, this RM16 million would have grown to whopping RM32.4 million – RM16.4 million more!
   
   Now, that is what one would call maximising one’s profit with minimal effort.
   
6. But instead, MCA took a rather more tortuous route to make a retained earnings with Delta Pride of RM11.42 million, which turned out to be much lower than the interest earned by parking the RM16 million in a fixed deposit and do nothing except twiddling one's thumbs.

Therefore, the allegation that MCA benefited financially from these student hostels is rather shallow.

The following are more facts for Chong (above) and DAP to ponder on:

1. Delta Pride has never benefited even a single sen from government grants – either directly or indirectly.
   
2. Delta Pride has never declared a single sen of dividend to MCA since it started – preferring to keep all its retained earnings in the company.
   
3. The retained earnings of RM11.42 million will be kept until the end of the concession period and will eventually be spent on remedial works before handing the campus ownership back to TAR UC – free of charge.
   
4. The directors’ remuneration of RM204,000 alluded by Chong are in fact directors’ allowances, at the sum of RM3,000 per month.
   
   Please note that these directors are people of stature and altruistic enough to have volunteered to serve society by taking on the responsibility to oversee the management of these student hostels.
   
5. Many of these directors are also based out of state and it would be deemed appropriate, if not decent, to pay them an allowance of RM3,000 per month to cover any travel expenses incurred when they attend any scheduled meetings.
   
   Furthermore, these selfless directors, without a due to their own well-being, in the eyes of the law will be held legally responsible should anything happen to the company.
   
6. The current hostel fees of RM215 per room is among the cheapest among all private and public universities and colleges, despite the fact that the hostel is located in a densely populated prime area of Kuala Lumpur.
   
   In addition, this RM215 is for a fully furnished room inclusive of 24-hour security, electricity and water charges, on top of other student amenities.
   
   That sum equates to RM7.20 per day. Is that overly excessive?
   
   Perhaps DAP can assist in finding cheaper rates for something similar in Kuala Lumpur?

Currently, the on-campus hostel provides safe and comfortable accommodation for 2,000 students every year and has benefited around 40,000 Malaysians since it started operation.

TAR UC itself has provided quality education to 210,000 Malaysians, including several cabinet ministers and a chief minister in the Pakatan Harapan government.

All these decades, there has not been a single allegation of mismanagement or financial controversy involving TAR UC or its hostels.

Instead, what has DAP done for our students?

Chong should stop and take stock and not merely spew out such slander that MCA is profiteering from TAR UC or its hostels.

If MCA’s main objective was to score a quick profit, these 10 blocks of five-storey campus buildings would have been torn down to make way instead for 10 blocks of high-end luxury condominiums in the heart of Kuala Lumpur, listing it as the most exclusive premium real estate property owned by MCA.

But then again, what is MCA - we are definitely not as business savvy nor good with our numbers compared to DAP - and most especially DAP's honourable secretary-general cum our esteemed finance minister of Malaysia.

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PAMELA YONG is the deputy chairperson of the Institute of Strategic Analysis and Policy Research (Insap), member of the Board of Governors of TAR UCC and an MCA central committee member. - Mkini