The favorite excuse of CEOs and politicians is always to attribute external factors as the cause of our inconvenience. Consider for example, the increase in electricity tariffs. Its unavoidable says the government because cost elements are increasing. What cost elements- workers' wages and cost of fuels? What about subsidies going to IPPs? These are the bigger subsidy addicts who deserve the mandatory death sentence.
Many years ago, our country suffered the worse outage in our nation's history. We were without electricity for many days. Manufacturers lost a lot of money. Industrialists were screaming their heads off and their voices reached Sri Perdana, the abode of the 4th PM then.
He came up with the solution. We have this problem because TNB has a monopoly. Monopoly is not good. Dependency on one supplier isn't strategic. It can be outright dangerous not to mention can cause untold economic damages if the system breaks down.
Let's deregulate the electricity industry he proclaims. So Ananda, YTL, Genting and others came rushing in. we can supply electricity sir. But we need to have iron clad agreements so that our investments are well covered. We must have a guaranteed purchase from TNB at secure prices.
But sir in order to generate our current, we need cheap fuels. Otherwise we bungkus or consumers will have to pay more. Never mind says sir, I control PETRONAS. I will ask them to sell you natural gas at subsidized rates. And so government pays subsidies up to RM 19 billion a year.
As many people now know, the electricity we consumed passes through 4 stages. Generation, transmission, distribution and retailing.
But boss, we will only generate electricity. We won't go into transmission, distribution and retailing. These are costly. Tarak untung. Kadang kadang untung.
In other words, TNB which has to invest in all 4 stages can offer us cheaper tariffs, but the IPPs awarded license which offer only generation of electricity cannot. How can this be? Apa nama? Macam mana?
Deregulation created an opposite effect in Malaysia. We ended up having to pay higher electricity tariffs because TENAGA was forced to buy electricity from IPPs who charged more for the electricity than if Tenaga produced it itself!
We come now to the stupid remark by the minister who says the government is powerless to reveal details of the PPA. Wasn't it the government that 'negotiated' the deals with the IPPs? So why can't we have access to the details?
Who were the first entrants to the IPP business? Genting Sanyen, YTL Power, Malakoff, SEV, Prai Power,Powertek, GB3, Tanjung Bin Power and Kapar Energy are among the two dozen or so IPPs in Malaysia. All of the above are owned by the Genting Lims, Francis Yeoh, Syed Mokhtar and Ananda Krishnan. These were the usual suspects consisting of the connected businessmen who get most of the big deals.
YTL Power's profit for 2010 was more than RM1.6 billion on revenues of RM13 billion. Malakoff in 2009 had a profit of RM380 million on revenues of RM5.6 billion. Powertek had revenues of RM1.34 billion and a profit of RM450 million.
So Francis Yeoh makes RM1.6 billion and Ananda Krishnan makes RM450 million from his IPP while collecting subsidies from public money. Tiuniamakahai!
It is essentially a transfer of funds from the people's pockets to the IPP's vaults, through TNB, aided and abetted by the government. But the imbecilic minister says we can't reveal. Of course we can't reveal because that would expose the scandalous amount of profits these business luminaries make.
Why should we continue selling fuel at subsidized rates totaling RM 19 billion allowing these people to make huge profits? And the only solution offered and supported by the CEO who's is paid handsomely is to raise tariffs further.
Let us illustrate the absurdity of this business arrangement. Look at the Thai power producers. They do not get subsidies and have to buy fuel at market prices. Fuels cost more in Thailand. Yet, despite the higher cost of fuels, Thai power producers sell electricity at a lower price than Malaysian IPPs sell to TNB. Apa nama punya economics ini?
So who really are the rapacious businessmen who are our own version of medieval German Robber Barons? Our robber barons get to keep their subsidies, and their unnatural, undeserved profits.
Peter Chin, the minister in charge of TNB must be mentally deranged. He claims that he cannot release the IPP contracts because it is between two private entities. Tiuniama punya minister. TNB is not a private entity; it is mostly government-owned. And the subsidies given to the IPPs are not private monies, they are public funds!
The reality is TNB is a very inefficient entity especially its operating cost. In 2005, the company's 40.5% operating costs were spent in purchasing electricity from IPP.
For the financial year 2010, TNBs energy cost grew by 2.4% to RM17,379.0 million from RM16,974.4 million recorded in 2009 mainly due to higher payment to Independent Power Producers (IPP), totaling RM12,528.0 million, an increase of 5.9% compared to the previous (RM11,827.0 million) financial year.
Hello Dato Sak,
ReplyDeleteGosh your diction has made quantum leaps in expressing your disgust in profane cantonese dialect!
But then any reader receiving this kind of replies from TNB management will equally support your vitriolic criticism.
Love it.... and more of this please
Dear Dato,The bigger beneficiaries of big time subsidies are of course the IPPs.They have a contract with the Mahathir Administration which guranteed them a floor that their profits cannot drop below.In return a kickback of a fixed percentage of the profits are paid to certain Ministers and their cronies.That is why the government cannot disclose the terms of the agreements.Or else(the shit will hit the fan).
ReplyDeleteJust look at the names of the main players of the IPPs.These are big time croonies positioned by Dr. M and gang in strategic sectors of the economy(to milk the cash register).The main difference between TNB producing electricity themselves and buying from the IPPs is the amount going into the pockets of politicians.Or else why subsidised private IPPs to guranteed them fixed profits.Why not subsidised TNB which is a GLC and the rakyat,who is the consumer can get cheaper prices.Then TNB and the rakyat are guranteed winners.
Deregulation of GLCs monopoly on certain sectors of the economy into free markets can have very positive effects on the rakyat and the economy.But to derugulate a monopoly into a fixed deposit monopoly will only have a negative effect on the rakyat and the economy.It will only be positive to the 'CROOKS' pockets.The public should demand that the government show the agreements signed with the IPPS.Then they should demand to see how much Petronas spent on bailing out the one with the receding hairline.
Dato' Sak, terima kasih atas maklumat, bukan sahaja kali ini tetapi di posting2 yang lepas juga.
ReplyDeleteSudah banyak kali kelemahan kerajaan dapat ditunjukkan dengan terahng lagi bersuluh tetapi amat malang di pihak kerajaan macam ada satu sumbatan atau kekangan yang amat padu untuk terus 'buat pekak dan bisu'.
Suatu mekanisme perlu difikirkan juga bagaimana semua ini, mesej ini dapat disampaikan dengan lebih berkesan kepada kerajaan supaya diberi perhatian serius.
Kenaikan harga dengan alasan yang sama seperti tidak membebankan rakyat, ,lebih murah dari harga negara jiran, kos elemen bla bla bla...bukan lagi sesuatu yang boleh terus 'ditelan' oleh rakyat sekarang.
Apakahd tidak ada badan atau mana mana saluran di pihak kerajaan yang boleh di sampaikan semua perkara ini supaya sampai terus kepada PM jika Menteri2 yang bertanggungjawab turut sama bisu, sama pekak dan sama buta atas apa yang rakyat mahukan.
Kenaikan harga bukanlah sesuatu yang sangat2 dipertikaikan cuma rakyat mahu ketelusan.
Dato',
ReplyDeleteSome IPPs will come to the end of their contract tenure soon. I shudder at the thought that the contracts will be renewed at an even higher floor profit margin by this rotten government. Before this happen, let us do something to change this government or else we will have to bear the burden of their greed and folly due to our own foolishness in voting them in.
Pak Tua
Let teach them in GE 13, if they dont change, we will change them. Just get ready for those corrupt leaders....
ReplyDeleteDato, we know all about this IPP and how they steal our money. The DAP has exposed this year ago but nothing has been done.
ReplyDeleteUMNO is like a Rock of Gibraltar. Million scandals and we can't knock it off. WHY?
Sir,
ReplyDelete"So Francis Yeoh makes RM1.6 billion and Ananda Krishnan makes RM450 million from his IPP while collecting subsidies from public money. Tiuniamakahai!"........
Jangan marah Dato'. It is a quick way for UMNO and Cronies to make fat money through kickbacks. I have no proof, just a perception.
I am waiting for Walla's piece.
Jaminan yang memberi keuntungan kepada IPP sebelum sesuatu projek dilaksanakan adalah sesuatu yang rasional. Tidak ada sesiapa pun akan berani membelanjakan duit yang begitu banyak pada sesuatu projek awam jika tidak ada jaminan pembeli dan pelanggan yang menguntungkan.
ReplyDeleteApa yang perlu di dalam perjanjian itu juga hendaklah fleksibel dan mempunyai had dan keuntungan yang rasional terutamanya jika projek itu telahpun balik modal atau mendatangkan keuntungan sebelum ini. IPP tidak harus menjadi kapitalis dan penghisap darah rakyat tetapi lebih kepada perkongsian sosial yang adil.
Rakyat wajar menggunakan kuasa 'suara rakyat' dan mahkamah sebagai satu cara untuk merungkaikan apa sahaja sikap kerajaan yang tidak prihatin.
"Tabung Rakyat" wajar ditubuhkan untuk melantik peguam yang berwibawa menguruskannya. (Sorry, bukan Peguam yang berpolitik)
Not fair, Latok! You marginalize our Indian brothers by not using Indian swear words -after all Ananda also involved in the party!
ReplyDeleteBut never mind, we feel your anger just as you feel ours (niamah!) as we bleed even more profusely.
Saudara AK47,
ReplyDeleteFirst of all, I have never commented any of your writings even though I find them interesting. Not that I agree to some of what has been written. But nonetheless they are interesting.
Ok now, my thoughts...
Remember Asas Serba's intention to take over the entire toll roads in the country?
Well, I can safely tell you the plan is workable if we only analyse the merits of the proposal. Nothing else... not even who is alleged to be behind the move!
Asas Serba's proposal:
1) No more toll hikes;
2) No extension of toll period beyond PLUS' concession agreement;
3) Immediate reduction of toll rates by 20%;
4) No more subsidies;
5) Assume the entire debts of toll roads; and
6) Remove all government guarantees.
If my memory has not failed me the above are the salient features of the proposal.
WELL...? If that is not good, I do not know what is?
Now let us fast forward to the present...
With a little tweaking, the same model works for IPPs...
I know who is behind Asas Sebar for a fact but I shall not dwell into that!
The same core group that was working on the toll road projects were also working on the IPPs... if only the government (read as UMNO/BN) were willing to discard their-know-it-all attitude, the government would not need to subsidize the IPPs...
Without even giving an opportunity to be heard, the government has denied Asas Serba an opportunity to reduce the burden on the rakyat.
Make no mistake! Asas Serba could and would still make money from the toll roads based on their proposal. The same holds true if similar proposal was implemented for IPPs!
When the government denied Asas Serba (largely, I was told because of personality clashes!), the government:
1) strained its resources by subsidizing toll roads as well as IPPs;
2) denies Sarawak and Sabah, the chance to have better infrastructure; and
3) a host of other stuff... (can't articulate them now... got to work!)
Whether my comments would see the light of day remains to be seen. That Sir is your prerogative that I would not question.
But I know what I am talking about because I have seen the proposal and the complete workings... Unfortunately I do not have a copy of them with me... I suppose I was being too straight when told that I could only read and return them (the proposal) after I finish reading.
Thank you Sir.
Dari Borneo ke Semenanjung Tanah Melayu.
Sak!
ReplyDeleteThanks for your insight on TNB and please whack any GLC THAT IS BLEEDING US DRY!
Tiunamafahaai! to them!
Perhaps a section on that Mahakutty misdeeds for us laymen to understand this cronies wheeling and dealing!!!!!
I truly agree with you. There is no way in hell that the govt will expose the IPP contracts. Everybody knows that there are so much shit hidden, its ridiculous. Malaysian are a passive bunch, always complain but dont do much. Why cant PAS or DAP or some saint take a class action suit against the govt or IPPs for force them to lower rates or open the contracts? Afterall, like everybody knows and says, its the people's money that is used to feed the IPPs survival. Just talking and cursing wont get us nowhere. Just a lot of stress and aggravation. But come GE13, WE WILL KICK SOME BUTTS....
ReplyDeleteDatuk,
ReplyDeleteLet us not beat round the bush. The whole blame must be put squarely on the previous party president(the one from Kerala) and all UMNO goons praise him to the sky. Untuk UMNO Baru, dia buat undang2. Ada undi bonus, ada kuota sampai dia menang tanpa bertanding sampai pencen. Dia merajuk, dia keluar UMNO. Dia suka, dia masuk UMNO balik dan disambut dengan gembira oleh orang2 kuat UMNO. Dia ingat UMNO bapak dia punya ke? And the sad thing is nobody dare to reprimand him in public. Why? Because the secrets of all of UMNO's top guns are in his pocket. That is how Mahathir play the game. He buys loyalty using taxpayers money. Who suffers? We, the rakyat. Ini pun masih ramai yang tak nampak dan masih nak sokong depa. Tiunaseng.
Savadeekap Dato,
ReplyDeleteI can understand your use of profanity in disgust of profits made by these IPPs at the expense of the rakyat. And these are the billionaires of bolehland who became billionaires making money from malaysians and not in the international market and don't contribute in exports earnings into the country.Here, we have a government who decides for the rakyat and have the audacity to place the agreements under OSA. Then, you also have Astro who repackage their channels in giving you unwanted channels while splitting up popular channels so that you have to pay more for it. First they raise money from public offerings, now that they are making money, its time to take it private. Lucrative monopolytic businesses has been given continuosly dished out to these players only..not mention others that you have missed out, kencana,scomi,sapura,gamuda and not forgetting..Perkosa and Co. Thank you la for continuosly bringing this country to the brink of destruction. Kanina..Chow..@#$%#!!Bye!!
Dear Sakmongkol
ReplyDeleteThose robber barons were single-handedly created and succoured by Dr Mahathir. I remember arriving at the old Subang airport to discover unpleasantly that a large part of the country was plunged into darkness because of some massive explosion or tripping caused by overload. Lo and behold, within weeks the ex-PM announced that IPPs would henceforth supply electricity to TNB because TNB couldn’t be trusted to do the job of generation alone.
The first off the block was YTL, who until then was just a mid-sized contractor. What distinguished them was Francis Yeoh’s contact with the Apa-Nama PM. He was said to be like a godson. Well, that would be putting it rather kindly. Some people have rather unmentionable terms to describe him, which is beyond the dignity of this blog to publish. FY flouted his connection. That’s the ironclad, tested way to tell one and all, especially little Napoleons, that he had real connections – don’t play, play.
We then have Ananda Khrishnan – Uncle Ananda to the growing Mahathir kids – who came to great wealth through trading Petronas oil. Uncle Ananda of course also got into the KLCC deal and Maxis. But you wonder what experience he had in power generation when he got the sweet deal.
A former rice trader, who also had access to Dr M, also got in. He is now the biggest in terms of total power output, next only to TNB itself. Only days ago, TNB awarded a massive 1000MW coal fired plant to his group, Malakoff, at a juicy 23 sen per kilowatt. Compare this to what TNB can generate at about 13-14 sen.
Now, what make these blood-sucking IPPs so lucrative? First, these IPPs have contracts to supply on take-it-or-leave-it basis. In other words, they will generate at the rated capacity and supply to TNB whether or not TNB wants the electricity. TNB must then throttle back its own plants to give priority to the IPPs. Since TNB can generate at a lower cost than the IPPs, it is forced to buy all that expensive electricity - restricting its own cheaper supply - which is then passed on to us. Second, the IPPs are protected should gas prices go up. They have “pass through” cost clauses, meaning if gas price goes up this is immediately billed to TNB, that is, us. Third, at the time when the first few IPPs were created, they sold electricity at 15-16 sen per KW when at that time TNB could generate its own at 12 sen. The later IPPs got a lower rate but are still obscenely profitable. If one wants to understand what rent-seeking means these IPPs provide a perfect example.
Is there no role for IPPs? They have, but not on those terms. Firstly, as is done overseas, IPPs must buy gas or coal at market prices. Secondly, they must compete on price to supply to TNB, so TNB gets the cheapest deal. This means the inefficient IPPs will make less money or even losses – no guaranteed off-take at high fixed prices, and no pass-through cost clauses. In short, no sweetheart deals, and no ripping off the public. How can they tell all this to the public? We have Dr Mahathir to thank for this rip-off.
Fantastic write-up.
ReplyDeleteSak, wud love to hear from you about the so called "acquisition" of RHB by MBB/CIMB. So many are saying that it's a given that RHB wud be gobbled up by CIMB.
Talk of MBB and CIMB fighting over RHB is just "sandiwara".
Well said, Dato Sak!
ReplyDeleteIf you take the profit over revenue, you can see how inefficient Malakoff is or rather we can deduce that something is amiss within the organization.
If I am the owner, I would be doing a thorough investigation to get rid wastage and plundering that is happening in the company.
Of course, that's if the owner is not the culprit himself!
Salam Dato,
ReplyDeleteI know Che Khalib, We were school mates at Penang Free many years ago. He comes from a humble background and I believe that he has goodness in his heart but has probably been overwhelmed by the position that he has. I pray, as we should all do, that Che Khalib returns to his good upbringing and reverse what has been done by others befor him.
Personal Note to Che Khalib if he reads it:
Life on this earth is only temporary. It is the good deeds that count. Dont be fooled by the promises of position and wealth. These things will mean nothing when we are dead. Che Khalib, you must fight for justice for the common folks, expose the wrongs and correct the mistakes. Resign like Ani Arope if you have to make a final stand. Rezeki hanya di tangan Allah; it is not with your paymaster. Allah will provide. Have absolute faith in Him.
If I have offended you, Che Khalib in anyway, I mintak ampun. But you must also realise that people have been cheated by the powers that be. As a person in your position, what have you done to reverse this? Will the common people forgive you if you do not? 28million of them?
Wassalam
Dato'
ReplyDeleteIPP is the major iceberge. The other icebergs are procurements related such insurances. How much medical and business insurance premiums could be saved? Stationery? Function halls? Staff bookings on facilities and messing? etc. The auditors must probe into all these.
"So, Francis Yeoh makes RM1.6 billion and Ananda Krishnan makes RM450 million from his IPP while collecting subsidies from public money. Tiuniamakahai!
ReplyDeletePeter Chin....Tiuniama punya minister."
Kudos to you Sak. Let's call a spade a spade. UMNO/BN Minnisters and TNB CEOs like these are all henchmen paid by the IPPs to protect them from a fair review and re-negotiation of crooked deals as is RAM and the bondholders mafia (usually EPF/PNB/Maybank/CIMB sometimes Temasik etc).
It's quite one thing when our homwgrown fraudtrepreneurs wangle 1 sided sweetheart deals from Mahathir; it's quite another when the Govt as a whole supports the com men against the Rakyat!!
Let's say it again-Tiuniamakahai!!!
dpp
we are all of 1 Race, the Human Race
Quote: "Apa nama punya economics ini?"
ReplyDeleteDato',
This is known as Mahathiromics !
We have to hail this home-grown great Malay leader who came up with this great economics theory which is still being practiced in our great Malay land.
Of course the great 'piratetization' policy is part and parcel of Mahathiromics:
The principle of this great Mahathiromics theory is:
Privatize the profits (to great entrepreneurs) and socialize the costs (to the not-so-great rakyat) !!
Jamal
Dato .
ReplyDeleteI love it ,cos your Cantonese comes from the heart , it speaks out our voices and those jokers deserved it. Chowhai.
Uncle Pat Hokkien- NIAMA not bad too. LOL.
By the way I enjoy your eyes opening articles-
Dare to be different !!
Sir, is all the gas sold to the IPP at subsidised price used to generate all of their electricity supply to TNB?
ReplyDeleteCan you trace how much in consumed, and how much is sent out of the country?
And Francis Yeoh once famously said that he is only the trustee of God's money.
ReplyDelete...and Francis once famously said that he was only the trustee of God's money.
ReplyDeleteDato,
ReplyDeleteTrying to make economic sense of IPP contract? How about making sense of Minister of Women, family and community being part of PM entourage to Kazakstan. Will her trip bring economic value to Malaysia or at least improve Malaysian welfare services when she returns home? Let's not hold our breath to know the answer.
dear Datuk Pulse.
ReplyDeleteIm a big fan of yours. Another super article! Your writings are like laser beams, if this does not prick the conscience, then they are beyond repair!
Stay well.
my oh my
ReplyDeleteYou seemed to be mighty pissed off.So what? and what next?
what can we do besides the ballot box? just stand aside and look? or whine, cringe and use swear words like you?
Tan sri Ani arope wrote at his facebook about the economic plundering unit.Wondder who sits in that unit and who calls the shot as well.
I am not sure if my comment gets approved because the last time around i tried to reason with you, i was called a stupido.It wasnt justified.Grow up
Why bising2 about IPPs?Those contracts are signed,sealed n delivered eons ago.YTL hv been minting enuff money to buy regulated industries in UK,Spore etc.Not to mention invest in prime assets everywhere.Thus the cashflow that the IPP hv provided hv fueled a lot more returns.But of cos they are not obliged to even give back a little.After all they are from the oppressed n marginalised grp in Msia.And so is lim n ananda.
ReplyDeleteNow. .back to reality.Lets stop the monster thats about to hatch.Its the Gamuda MRT windfall.After,direct nego dams,smart tunnels,double tracking (worth 20 bil?) their hunger still unabated.Now they want to rip us off further thru MRT PDP n swiss challenge tunnels.Thats potential lip smacking 8 billion in d pocket?
Of cos it wld be racism to stop this cos they r the marginalised n oppressed ppl too.Don't worry abt the bumi partners cos they r just riders in the sandstorm n googled to see pink when blood is order of the day.
Anyone dare to raise hell on MRT?Of cos not cos Elections are not cheap.
Bravo Dato', I just love the fact that your argument gets better when you speak it in Cantonese ! I was ROTFLOL !
ReplyDeleteDato, Peter itu memang kena diao
ReplyDeletetapi emak dia jangan lah!
Diao Peter.Peter diao!
"Pandikutty " would have been a more tactful word than your cantonese profiling, Sir.
ReplyDeleteLarceny is the name of the game.
Wah... bagus punya article datuk!
ReplyDeleteSaya rasa opponent datuk telah di KO'kan pada saat Datuk tiunamakahai!
Bagus!
Inilah sample seorang Datuk yang berotak dan beragama!
Gua caya samalu datuk sak!
The TNB management team is just incompetent. It's also running a university that does not make money - always facing deficits. When many other private universities are making profits, the one run by TNB is not. Why still insist on it when losing money? Is running a university - at the expense of our money - TNB's core business? TNB must reform. TNB cannot simply increase electricity tariff at the expense of the poor rakyat and keep on mismanaging the company.
ReplyDeleteapanama kerala economics-rob the poor to feed the rich. how rich is his family? ask FORBES coz you never get it from apanama Kerala.
ReplyDeleteafter taking a ride on the public, he preaches about living God's ways. Profanity
Dato Sak,
ReplyDeleteWhen are you coming over to join the opposition? We need people like you! You are genuine in fighting for the rakyat and supporting our daily struggles.
If the opposition takes over Putrajaya, I bet you would make a good leader, perhaps a minister or DPM??? Who knows.
Come join the struggles of the ordinary man in the street, come join the opposition and stay committed to its fight against injustice and corruption.
Way to go Dato' keep up your good articles!
Now you all know why YTL, Genting, MMC and AK is so rich. Got IPP buta money. The ordinary and poor people feeding the rich.
ReplyDeleteThese are the assholes that make the money and talk big about such catch phrases such as "world class products at third world prices", but what they forgot to mention was that they earned FIRST CLASS PROFITS from us the obedient rakyat.
Dato' I support you in your call of the word Tiuniamakahai!
Steady Dato'
Dato,
ReplyDeleteCertain people in the present and past government are in too deep and cohorts with the IPP. The rape and plunder by these IPP and others (example, toll concessionaires) at the expense of the rakyat will not stop until the country is fully bankrupt and collapses. And who will bear the full brunt of the country's collapse? My bet is the malays will be the ones who suffers the most because they were made handicapped and addicted by the NEP. Being the majority population, they allow themselves to be led by their noses by the likes of TDM, Bad-awi and Jibby and their UMNO cronies.
The rich and wealthy benefactors of the corruption and plunder will all be laughing their way to their luxurious retirement homes in UK, Bahamas, South Africa, Australia when the country collapses. And we still have the likes of Perkasa Ibrahim Ali and his goons, Pembela, KIMA, etc all creaming on top of their voices while the people they serve are screwing them left, right, centre, top and bottom. How more stupid can one gets?
Dear Dato',
ReplyDeleteYou are no longer a serving member of parliament, but are now serving a bigger constituency - the whole nation. I must thank you for raising an issue when the common man's plea falls on deaf ears.
Admittedly, this is a revisited issue. TS Ani had half a page or was it full page of a national daily. Yet it sank in the Bermuda Triangle.
Your column hits the gong with such a sharp note that the waves will reverberate far and long. It signals strongly the elected representatives - SERVE THE RAKYAT, not yourself.
Keep going Dato', keep the politicians honest.
Sir,
ReplyDeleteCan you please enlightened us on where ASB gets its money for dividends?
Dato'Sak,
ReplyDeleteThe Malay populace especially rural areas are unaware what IPP stands for. If only someone can reach out to them and make them understand how IPP subsidies are bleeding the rakyat's wealth. A class action suit must be filed - this ripping off is criminal!
How did the IPPs manage to get a foot in the door of TNB?
ReplyDeleteThe former executive Chairman of TNB had disclosed that there were no negotiations and it was forced upon them by the EPU.
The most important fact is the lack of competitive bidding for selection of the private power generators even though the structure of the power purchase agreements could have been made to work if they had followed the example of the US utilities which they had visited to gain an insight into their selection process and power purchase agreements.
Malaysian IPPs did not have to submit competitive bids but were selected merely by some omnipotent entity pointing at a suitable crony. This is the main reason for the high cost to TNB and the exorbitant profits enjoyed by the IPPs.
It should be noted that gas subsidies to IPPs do not arise as the energy part of the pricing is a "pass through" arrangement even though a very efficient operator can squeeze substantial profit from this portion by maximising plant efficiency and minimising O&M costs because of EPU's generosity when pricing these items. Their main profit comes the Capacity Payment potion which is calculated on the basis of an initially overpriced project cost aided by creative bean counters.
The plant construction contractor who is probably connected to the IPP would have made a killing with the overpriced project cost to start with and the IPP then collects an overpriced Capacity Payment for the duration of the PPA.