Tony Pua should ask YTL to give him their expired power plant for FREE!
LSS Report
As a person who is supposedly a graduate of a famous UK university and as a responsible Member of Parliament, this must rank as Tony Pua’s post today is his most irresponsible posting to date.
Tony Pua wrote:
“Question is why did 1MDB overpay (for the IPP) when they could almost get some of the assets for free?
They paid RM2.3bn for Genting Sanyen when it’s worth only RM400m in Genting’s books as there was less then 3 years left to the concession. Why didn’t 1MDB just wait for the concession to expire and get it at scrap value?”
Before I begin to expose how Tony Pua is exploiting his supporter’s lack of business sense, I have some good news for YB Tony!
YTL’s the concession for YTL’s two power plants in Malaysia expired just two months ago on 30th September 2015. While the plant in Paka was extended on a short-term basis for less than 3 years, YTL’s 400MW plant in Pasir Gudang was not renewed.
Thus Tony Pua should immediately call YTL and ask them to give him the power plant for FREE!
Okay, back on topic.
Firstly, did you even know that the Genting plants that 1MDB bought were relatively well-maintained and that Genting had put in a bid for an extension in the 2012 round of Power Purchase Agreement tender from the Electricity Commissions?
Yes, Genting already put in a bid for renewal even before 1MDB bought it. Did you even check with 1MDB whether there was a Conditions Subsequent in the agreement between 1MDB and Genting that the final price to be paid was on condition that the plants were renewed?
You are in the PAC, you can easily ask.
Yes, the plants was then renewed for another 10 years ending in the year 2026 and 1MDB bid the lowest rates of all renewals – hence reducing the price of electricity to Tenaga and to Rakyat.
So much for Free and scrap metal.
Secondly, as a person supposedly able to understand business and read financial statements, surely Tony Pua understand that book value and actual sales price would differ?
For example, the book value of Apple Inc – even with their formidable assets – would be much less than their actual market valuation. You are not buying assets but you are buying an actual business of an operating entity.
I am confident that Tony Pua understands this difference between book value and actual market valuation of a business – which would then mean that Tony Pua had meant to mislead his supporters lack of knowledge in such manner,
Genting’s own Financial statements for the year ended 2011 when it still owned the plants showed that this particular Genting Sanyen asset was making RM231million per year. Check under the results for “discontinued operations”.
