The bigger subsidy addicts
SAKMONGKOL AK47
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.
