DAP agrees with Ku Li on power deals RCI
By Boo Su-Lyn, The Malaysian Insider
KUALA LUMPUR, June 12 — The DAP threw its support behind Tengku Razeleigh Hamzah for a royal commission of inquiry (RCI) to investigate Tenaga Nasional Berhad’s (TNB) contracts with independent power producers (IPPs).
“The RCI would determine how severely the lopsided deals are burdening consumers with the rise in electricity tariffs and introduce measures to either reduce or remove this huge financial burden on the people,” DAP secretary-general Lim Guan Eng said in a statement today.
Tengku Razaleigh, who is the Gua Musang MP, said recently that it was crucial to tackle the issue of rising power prices before the effect begins to take bigger bites out of the average consumer.
The Cabinet raised power tariffs by an average of 7.12 per cent effective June 1, in a bid to trim a growing subsidy bill and widening fiscal deficit.
But the move has also thrown the spotlight on the purchasing power agreements that TNB is engaged in with the IPPs.
“Up to end 2010, Petronas has extended about RM131.3 billion in gas subsidy to both the power and non-power sectors,” said Lim.
“The greatest beneficiaries of the RM131.3 billion gas subsidies are IPPs, who also benefit from a guaranteed buyer through the compulsory power purchase agreement signed by TNB,” added the Penang chief minister.
He pointed out that YTL Power made a profit last year of more than RM1.6 billion, while Powertek and Malakoff snagged profits of RM450 million and RM380 million respectively.
“There is no logic or reason why the Barisan Nasional (BN) government should be so concerned about annual savings of RM226.8 million from the reduction of diesel subsidies or RM116 million from the reduction of sugar subsidies or electricity tariffs that will save a total of less than RM1 billion, but are not concerned by the huge gas subsidies given to the IPPs,” said Lim.
Prime Minister Datuk Seri Najib Razak has also slashed diesel subsidies effective June 1, a move that recently sparked a strike among fishermen and trawler boat operators in Kuantan.
