The Power Barons and GE-13
Written by Iskandar Dzulkarnain, Malaysia Chronicle
Once again Malaysia is embroiled in the IPP issue. Malaysia recently raised electricity tariffs by 7.12 percent. The government tried to assure consumers that 75 percent of the people will not be affected, but few Malaysians were convinced.
Intuitively, they knew the Najib administration had discarded the fact that those who were hit by the hike would surely pass on their additional costs to other consumers. There would be knock-on inflation. When petrol prices were raised a few years ago, the cost of living went up. When petrol prices were reduced, the cost of living did not go down ever again.
One of the most sensitive issues affecting Malaysians is inflation. Already in the Klang Valley, stagnating salaries coupled with a higher cost of living has affected everyone. The ringgit is practically useless nowadays. Try changing it to USD or Aussie Dollars and you will scream murder. Before, if a person finds a 50-cent coin in the street, they will smile at their little fortune, but today many people don't even bother to pick them up.
Any rise in the cost of goods and services will have a chain effect that can destabilize consumers. Residents in the Klang Valley who earn higher income than rural dwellers feel as much a pauper as their counterparts. No one can shake the feeling of discomfort at how much less our ringgit is now worth. The Government seems to think that Malaysians wouldn’t mind another price increase. Whoever gave them that idea, they are so wrong!
Super top-secret
When the issue of the IPPs was first highlighted by PKR and Opposition Leader Anwar Ibrahim, the revelation that these huge firms were being subsidized to the tune of RM19billion shocked the whole nation. Energy minister Peter Chin immediately issued a statement that the Government contracts between the IPPs and Tenaga Nasional Bhd were secret and confidential and could not be disclosed.
How amazing is that? Super top-secret under-counter deals involving government subsidies to the tune of RM19 billion a year confidential and not allowed to be disclosed to the public? The plot seemed to thicken.
Then Mukhriz Mahathir, deputy Trade minister, announced that such contracts can only be disclosed in Parliament. So Malaysians have no right to know and they have got to live with it. He also refused to comment whether MPs would be given copies of the contract to study any improprieties.
Tengku Razaleigh Hamzah also called for a Royal Commission of Inquiry to probe the Tenaga contracts with the IPPs, saying the lopsided deals may be burdening consumers. He also said RCI must investigate and propose the best suitable measures to be taken by the government to ease the burden on the consumers.
Former TNB chief executive Tan Sri Ani Arope openly criticised the power purchasing deals as “economic plunder” in 1996. Ani then chose to resign from his executive chairman post rather than sign the imbalanced deals, which saw the first generation of IPPs created.
Do we need so many IPPs
Even with all the billion ringgit subsidies, TNB has no control of the price it has to pay to the IPPs. Why can’t TNB just buy over the IPP’s instead? Why do we need so many IPP’s in the country? We already have a surplus electricity reserve margin of 42%, compared to 20-30% margin of other countries.
Why are IPPs still generating billion ringgit profits at the expense of the consumers? Why is the government siding with the IPP’s? Why does the government kneel to the IPPs instead of siding with the people? Why are the power purchasing agreements between TNB and the IPPs classified under the Official Secrets Act? Doesn’t someone smell a rat?
The most important question to the government is: why should the people lose out, at the expense of IPP who are still raking in billions in profit? Shouldn’t the government ensure that everyone shares the burden equally?
The government drafted these agreements, signed and sealed it; yet the government is powerless to unseal it. The people are at a loss as to why the hands of the government are tied.
What is so secret about a commercial agreement? What is so "Official" about them if the Government is not a party to them? If the Government is not a party to the Power Purchasing Agreements, then it is none of the Government's business. So why classify them in the first place? If the Government is not able or willing to reveal details of the PPAs, surely it has the power to declassify them?
Malakoff and YTL
Now, lately we hear that Tenaga Nasional is buying power from Singapore-based PowerSeraya Ltd, a unit of YTL Power International Bhd, in anticipation of an expected 'shortage'.
It was also announced lately that Malakoff is to be awarded a project to build another 1,000 MW power plant. The plant will be given a 15 year concession to sell the power at 25 sen per kwh to TNB.
They can build all the plants they want, but TNB should buy at attractive rates, which should be at 6cents a kilowatt, not at a rip-off rate of 25cents.
MMC, Malakoff’s parent company, is owned by Syed Mokhtar Albukhary, who is one of the richest businessmen in Malaysia. This deal will make him richer still as he already owns at least 6 IPPs in Malaysia with Power Purchasing Agreements, which make them no-loss Enterprises.
There have also been news reports that allege that Syed Mokhtar was the only tycoon in town willing to fund Najib in the coming 13th General Election. With Seraya joining the picture, has YTL boss Francis Yeoh also agreed to fund UMNO now?
It looks like GE-13 will be called soon. Perhaps Parliament may be dissolved during the current sitting from June 13 to June 28, in which case, we would be looking at snap polls in July or end-August-early-September - just before the onset of Ramadhan or just after the fasting month perhaps during the long Hari Raya and Merdeka break.
- Malaysia Chronicle
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