Now Mahathir is a real politician. He is true to the Gaullist description of one who doesn't have permanent friends but only permanent interest. His overriding interest has always been to stay in power. Even now in his closing years his interest is to exercise power.
I Here are 2 comments which I selected to share with readers. The first comes from a person known as OneMalaysia. The second comment comes from a person, residing I presume in Borneo. Those robber barons were single-handedly created and succored 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. II First 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.
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.
The political blooper of this decade must have been this. The minister of this ministry says- we can't do anything to reveal the details of the IPP agreement. I think this reaction is shared by many people in Malaysia. We almost fell off our chairs in disbelief. The government has no power to reveal the details of IPP contracts. If the government cannot declassify, who can? I hope this minister will not be selected as a cabinet member the next time around IF the BN retains power. Two, this absent mindedness is increased further by the equally bizarre statement by the TNB CEO. By the way, he takes home a RM 1.2 million pay packet per year and we paid him to come out with this kind of statement. Profitability depends on being able to increase a take it or leave it price. You no pay you no electricity. He was thankful; the government has agreed to raise tariffs. TNB made RM 4 billion on revenue of RM 30 billion he's thankful, rising costs will not eat into the profitability. Yet he was practically crying throughout 2010 urging the government to review this and that. He ensures profits by raising tariffs but not by tackling the costs centers. Where is the source of much increase in costs? Do they come from increasing wages of its employees or payments to IPPs? Or business misadventures in Indonesia. The price hike of TNB tariffs is a reprieve for TNB. Pray tell us then, where is the qualitative difference between a TNB CEO and a kacang puteh seller if both depend on a price INCREASE to be profitable? The answer none- because both their profitability is the result of raising prices. Anyone can increase profit by raising prices. This isn't what we expect from a CEO who earns maybe close to RM 100 k a month. We expect him to be profitable because of efficiency, because of cost cutting measures, because of streamlining operations and because of far sighted procurement policies. So the TNB of now that he helms, hasn't moved qualitatively from the TNB he started to lead. A few years ago, he justified the massive losses in coal purchasing deals that went awry as being not worrying because TNB's earnings are humongous. TNB earns billions each year. So, because you earn a lot, its ok to lose a few billions of public money. We therefore hope his contract as CEO will not be renewed. Nothing personal, just business. As a first start to cost cutting measures, we suggest therefore the top TNB bosses volunteer to have the pay cut and that portion be distributed as wages to lower income staff members. Why? Because TNB staff is some of the lowest paid workers in the country. The big chiefs in TNB whose only managerial prowess nowadays seem to pressure the government to raise tariffs are shocking. Che Khalib Mohamad Noh earns RM1.8 million a year in total. TNB's second executive director, Azwan Mohd, who was appointed in April 2010, received a total remuneration of RM755, 320.22, including his basic salary of RM457, 440. What of the TNB 'Indians'? While paying the big chiefs the above amount, in the same year, TNB kept its minimum wage at RM750 a month, only slightly higher than POS Malaysia's RM635. The wage difference is scandalous. Che Khalib has been responsible for some heavy losses and he has presided over some bad deals over the purchases of coal fields in Indonesia. He should have his salary reduced or even relieved from his post. But as usual, government linked companies (GLCs) which tended to be top-heavy pay their CEOs huge salaries seemingly to reflect their managerial talent. It's time for the government to cap salaries for the bosses so that wealth could be spread towards the bottom through better wage schemes.
I simply must share this rapier sharp analysis from my intrepid commentator, Walla. I accept it as a singular honour that he finds time frequently to visit my blog. He does too on a few other blogs. When he drops in for a visit, he leaves behind valuable gems of thought. A: 'I miss you, Sir.' B: '(eyes pop, jaw drops, kretek embers land on sarung, burning hole size of ten sen coin)..You do? Well then, goodbye pink mop, and hello Sofea!' A: '(looks at smoke spiraling up) Oh dear, is it hurting?' B: '(grins bravely) Not yet.' A: 'Emm, Shall we not focus on your sartorial simplicity for the moment but ponder what our blogger has written? I think he has written another intelligent piece.' B: '(flicking ash off) that's hardly surprising, Sofea. With only a few exceptions, the others in the Umno leadership also display intellect too. Unfortunately all bovine. Kekeke.' A: 'I see you have not lost your bite.' B: 'But the other wire has also broken off....oh, never mind. What is it that weighs on your lovely brows, Sofea?' A: '(eyes roll). I think Umno's revolution will never be finished because the brobdingnagian challenges it has been facing will soon consume it completely.' B: '(jaw drops again, twenty sen coin). You mean its legacy problems of economics and politics? Give me a minute to respond. (Turns away, opens kamus)... I think it's like this, Sofea. Every organism in life goes through its own phases of growth and decline. Under normal circumstances, they trace a sigmoid curve. First, slow palpable growth, then rapid accelerating growth, and finally slowdown to a plateau before decline to end somewhere. The key to maintaining growth, or in this case political relevance, is to continuously find new S-curves before expiry of the old one. What has been happening to Umno, Barisan for that matter, is that it has not been able to locate new relevance for itself anymore that can not only equal the original kickass spirit at the time of the formation of this country but also provide a real counterbalance to the emergence of new forces of change demanded by the rakyat.' A: 'But, Sir, Umno's government has been delivering the goods to the rakyat, don't you think so?' B: '(eyes glint). You really think so, Sofea? Let me ask you two questions. Firstly, which government can govern for long if it doesn't deliver goods to the rakyat? In other words, any government run by any political party worth its salt will have to deliver goods to the rakyat. That's what governments are for, isn't it? So don't arrogate to Umno some transcendental right that only it knows best or can do best. It hasn't and it doesn't and, by the denouement of recent events, it won't. Remove the fulcrum of its spin and you will see its politics has devastated this nation. Let me put it bluntly - even if Umno wins the next general elections, the country loses, and frankly, i think it'll be the end. Which comes to the second point. By itself, politics is just a tool. It is just a tool to levitate and moderate the economics of nation-building. And the fortunes of Umno and Barisan have risen and fallen with the economic fortunes of this land. We must understand why. When Malaya started, much of the country was relatively under-developed so that the potential for growth and development was assured. With expansion of the population, demand for goods and services increased until we reached the high-flying days of the 70's when hot money flowed in followed by massive FDI that had helped build an industrial base beyond our plantations. Public finances were also shored up by oil and gas revenues. Today, all that has changed. Hot money is only here to take occasional pot shots at punters in a market where share prices have had to be quoted in sen so as not to reflect how minute are the valuations. And that is because the fundamentals of good management to build real enterprises have been sacrificed for window-dressed performance not shored by real capabilities. Next, FDI where it really matters is only going into industrial bases in Opposition-run states like Penang and Selangor. The others? Buildings again, as if another complex can produce things for export to earn currency to discharge deficits. Come to think of it, what has happened to Zamry's Perak state projects? He's quiet as a tikus, no? And other investment projects? The announcements are reruns of the same projects, like Rais' tv movies. And let's not belabor how our oil and gas resources have depleted, even for their half-hearted verisimilitude of new finds. Aren't we now importing gas as well? Sofea, the economic legacy of Umno's politics of the 70's is the problem today. That period was growth but few saw that it was growth borne by subsidy. Instead of realizing it hard enough then to build real capability for the future, they just sat back and milked the cash register. So that now when reality has finally bitten, the entire Umno leadership is amok, and right after the Sarawak elections, if you would care to note. Because they have suddenly found the twin threat to their personal survival from the convergence of economic non-sustainability and political irrelevance. All those wild spending in the 70's went into crony projects and piratisation schemes but with financing charges for the treasury's attention. Just imagine, one of many such financing charges is no less than USD1 Billion. The rakyat are indirectly asked to pay for generations to come for a project that was not tendered out properly but benefited cronies who declared huge dividends to themselves while protecting their turf by cabling into Umno to bear the risk on some flimsy rakyat-centric excusatory spin. Now, how did this happen? It happened because someone whose son has just been paid RM90 million for the land where resides Pudu wet market thought he was clever by buying early ahead of future inflation but clean well forgot how financing charges can balloon the final cost, what more on depreciated items. And who will ultimately be paying for these mega-projects from future benefits foregone? Our momentarily happy, jomhebohing, rakyat.' A: 'I see what you are driving at, Sir. In fact i cannot understand how a government which could finally release the details of the road toll agreements could not release the details of the IPP agreements. After all, isn't TNB a government-linked enterprise?' B: 'Exactly, Sofea. Too much dirt has been swept under the carpet. Now the rakyat have the internet as their vacuum cleaner. It's all coming out and the shit has hit the fan running at speed tiga. And our Barisan jokers have the nerve to say seventy five percent of households won't be affected by the power tariff raise. Well, if this government is so clever to talk about positive multipliers for the ETP projects, why can't it answer whether there won't be negative multipliers for this tariff raise? Electricity courses right through all businesses and inflation will kill our poor. Because their income is static with no prospect of near-term dynamic. Meanwhile, their families starve. Shit!' A: 'I empathise and agree, Sir. This country was given only one providential chance to transform itself starting from the 70's. But Umno and Barisan didn't do the right things. It only had the idee fixe about hardware and personal aggrandisement. It did not embrace the necessity to constantly feel vulnerable despite the good times of that past era. It failed to subscribe to a long-term commonweal for all the rakyat but instead did all the pejoratives to only amplify those who could guarantee support of its elites so that they could continue to harvest their positions. Unlike Nottingham forest, the rich robbing the poor. The nations which really thrive are those with weltanschauung, or pragmatic world views. Umno never had that because it infested itself with those displaying only the brains of ocelots which would explain their jejune behavior unbecoming of real leaders. Perhaps that will explain the mad political propaganda of using the youths to protect Putrajaya. Isn't that like the Sheriff of Nottingham using the long-suffering peasants of the land to protect his castle?' B: 'Yes, parsing what you have said, who can deny the present Umno leadership is just made of chicken-livered, yellow-bellied, scrofulous poltroons? Our Malay race, and by that i mean the real Nusantura's, is marked by savoir-faire characteristics. What's that phrase? Ah, semper aequus. Well, the Perkasa's, Utusan's, Gaps and so on, so forth have just finished those characteristics with their racist taunts officially excused off as expressions of community and norm. Before the whole world, how shameful to drag the Malay race down to that level of gutter politics?! Those jabbering and hawing jokers don't even know how to interprete the federal constitution. Sofea, with all that, you can jettison any hope of 1Malaysia taking root. It's finito.' A: 'Sir, i sense they knew all along. They just wanted to drive the less-informed segments of the community towards some fear-struck loyalty towards Umno, little realizing that the Umno of today bears little resemblance to that of the Umno of yesteryear which had carried the real torch of our community. Nowadays, that torch is just for a few elites to enter the den of thieves and cart away the national jewels. Anyway, our urban Malays will take the message home to their kampongs and wake up even the dead. Indeed, i am puzzled how the son of an ex-premier can possibly own that piece of land. B: 'Perhaps it's because the father had owned the other piece of prime land along Jalan Tun Razak? He, the man who said he was not interested to know any project below two million ringgit? I give up, Sofea.' A: 'Yes, Sir. Arrogance is manure for the vineyard of error.' B :'(fifty sen coin) Indeed?!' A: 'How do you see the GE ahead?' B: 'Penang, Kedah, Kelantan, Perak, Selangor, Federal Territory plus parts of Terengganu, Sarawak and Sabah. And if the Almighty so decides, a taste of Negri Sembilan, Melaka and Johor as well. Pahang, Perlis and Labuan, Barisan can keep.' A: 'Then the real revolution will be by the rakyat, Sir.' B: 'It always has been that, Sofea. The MENA states in the Middle-East have shown the way. The Almighty is the Final and Ultimate Reckoner and sees through all pretenders. Even those who use the federal institutions to win by unfair and most cruel means. Meanwhile let's pray those PSD scholars will get what they have really earned, not some halfbaked unscrupulous measures unbecoming of our Malay race. I leave unsaid Umno's racist treatment of our STPM scholars. To deny them any full-fledged state scholarship for overseas study of their choice i would count as an execrable act which will exact the full fury of our nonMalay voters.' A: 'Sir, please say no more. We all know why and who. Umno has never had a fair and just gesamtlösung for our nonMalays.' B: 'And that is finishing off this nation.'
UMNO's unfinished revolution: one step forward and 2 steps backwards. We can't go back to 1946 and wished the motivations and inspirations that awoken the Malays remained unchanged. That wish would have to assume that every leader is born at the same time and is of similar constitution- boldness in character, dedication to public service, possessing selfless dedication. Let me illustrate the stark contrast in character constitution that I refer to. When Tun Razak died, he had little money. His only liquid asset of any merit was the Magsaysay Award. He didn't have enough funds to finance his medical bills in England. After he died, the government had to step in to give his wife a home for her and her children. When Tunku Abdul Rahman died he too had no money. A few times he was saved financially by Tun Datu Mustapha. Let's take the case of a more plebian leader- Khir Johari. When he was alive and in power, all sorts of accusations were hurled at him. I remember looking at a picture of him and his wife donning traditional Chinese costumes wishing the Chinese, Happy New Year. It was probably done in good sport. Towards the end of his life, every one found out he had only one house in Bukit Damansara. Those rights over that house were disputed. In the end he had to leave the house and moved into an apartment. He died in that apartment. What these examples show is that, by and large, these first generation UMNO leaders were actually of selfless material, enjoying the trappings of power indeed while in office, but taking none after they leave. Present day UMNO leaders are a world apart. The majority are loud in every sense of the word. This difference can only be explained by one factor. UMNO has been taken over by leadership of different material who is conditioned by different experiences having less service to the public motives. This may be a shocking admission – but I hope the present day UMNO leadership is aware of the general perception that is getting stronger by the day, that present day UMNO leadership consists of a bunch of sly politicians intent on making hay while it shines. But certainly, what we could expect is to have those motivations and ideals behind the UMNO of 1946, refined and enhanced. From closed mind to openness, from debilitating traditionalism to modernism. These must the founding principles behind the 'betulkan orang Melayu' drive of Onn Jaafar. Sad to say, UMNO must bear the primary responsibility over the more or less unchanged mental landscape of Malays in general. UMNO alone is responsible for the regressive ideas of Malays. If they have been sleeping over eons, they now have been given sleeping pills to slumber along while the world passes them over. Over the years, UMNO leadership has caused the motivations and inspirations that moved an entire nation to degenerate into besieged paranoia and parochialism. So before I go on, maybe it's timely for me to remind Malay readers especially of what Zaaba said some time ago. I tell you not in mournful numbers That the Malays are a dying race I only want the soul that slumbers To wake and work in these bright days I tell you not in mournful numbers The way in which to improve the Malays I want that each Malay remember Modest, contented shouldn't be always. Allow me to explain. What was the catalyst that galvanized the Malay population? Without a doubt, it was the idea of a Malayan Union. Regrettably I am not going to repeat the usual stuff about Malayan Union etc. etc. Malayan Union must be regarded as a wakeup call for the Malay leadership to understand, that Malay politics cannot remain forever insulated. The rule is that those who failed to adapt perish. Those who failed to acquire tools for survival disappear. The present day leadership of UMNO and UMNO members must be conscious of the bigger designs of the Malayan Union. UMNO got the Malays a reprieve to adapt. If UMNO fails to do so and Malays do not succeed in adapting, it means UMNO has failed the Malays. If I were to view objectively the clash between the world represented by UMNO in 1946 and the new world represented by Malayan Union- I would have to say things in the following manner. UMNO's resistance and objection to the Malayan Union then was the result of the awareness of Malay leadership in general, that Malays were not ready for the challenges of an open society. For that is what Malayan Union represented really- an open, competitive and democratic arrangement in the relations of the citizens of a modern world. Malays were not ready. The mission of UMNO then would have been only one- to prepare Malays to be ready for the open world. Equipped, competitive and having the tools to do so. UMNO's mission was never to dig deeper into a trench and cocooned itself and Malays in general. If those were the objectives of UMNO, it was wrong. If these are UMNO missions as understood by present day leadership in UMNO, then they shouldn't be helming UMNO.
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