SUBSIDY OH SUBSIDY... Since subsidy was a big thing in the budget yesterday, let’s talk about subsidy to Malaysia’s Independent Power Producers (IPPs). The question is: THE MAIN QUESTION FOR ME IS WHY DOES THE GOVERNMENT HAS BEEN BUSY CUTTING SUBSIDIES OF THE NORMAL CITIZEN YEAR IN YEAR OUT BUT NOT CUTTING EVEN A SIGNLE SEN SUBSIDY OF THE IPPS? Go figure and tell me what I don’t know… And here’s more facts that makes your heart bleeds…. In his book published by the Fulbright Alumni Association of Malaysia, former Tenaga Nasional Bhd (TNB) executive chairperson Ani Arope reveals how, after the landmark blackout in Peninsular Malaysia in 1992, TNB was forced to surrender the land it had acquired in Paka (Terengganu) and Pasir Gudang (Johor) to a third party for power plants. This started the era of the independent power producers (IPPs) and the first was YTL Power Generation Sdn Bhd. This was followed by a slew of other IPPs - Powertek Bhd, Genting Sanyan Power Sdn Bhd, Segeri Energy Ventures Sdn Bhd, Malakoff Bhd, Tanjung plc, EPE Power Sabah Energy Corp, Alpha Intercountl Bhd, Sutera Bhd, Cergas Unggul Sdn Bhd and Ekran Corp. Although Ani, who is Malaysias first Fulbright scholar, had felt that the power purchase agreements with YTL for a period of 21 years - from 1994 to 2015 - were too darn generous, he was pressured to ink the deal, which had been drafted by the Economic Planning Unit (EPU). Then prime minister Dr Mahathir Mohamad was the man who engineered the rise of IPPs. There was no negotiation; absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the EPU. And we were harassed, humiliated and talked down every time we went there. After that, my team was disappointed. The EPU just gave us the terms and asked us to agree. I said no way I would, Ani reveals in his recently released memoirs. Ani, who was under a lot of pressure to sign the agreements, felt the deal was morally wrong and lopsided. If it is legal and not fair, I will not do it. If it is fair and illegal, I still wont do it. It has to be legal and fair, he says. According to Ani, TNB at that point was producing electricity at 8 sen a unit (kWh) and this could be delivered at 17 sen per unit. However, the IPPs were producing electricity at 23 sen per unit, therefore TNB would need to charge consumers no less than 30 sen per unit. And YET, the IPPs received gas subsidies from Petronas Gas for 21 years and currently making astronomical profits. News is that Petronas was loosing hundreds of millions Ringgit a year due to this subsidy. The IPPs raked in benefits from ALL sides, but we the RAKYAT is being made SCAPEGOATS and SCAPECOWS for subsidy cuts. May Allah help and save us from this tyranny. Ameen.
Posted on: Sat, 26 Oct 2013 12:13:09 +0000
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