Ever Wondered why Pakatan never talks about the lop-sided “crony” IPP agreements anymore?
LSSReport
The late Tan Sri Ani Arope said he was fired from his job as TNB Chairman then because he refused to “play ball” with Tun Mahathir in cutting lop-sided deals with the Independent Power Plant operators.
In an interview conducted just months before his death in 2014, Tan Sri Ani Arope said:
“At the time TNB were producing electricity at eight sen per kilowatt hour (kWh), said Ani. Taking into account transmission and distribution costs — which were about six sen and three sen respectively at the time — the power distributor can deliver electricity to consumers at just 17 sen per kWh.
For IPPs to come in, the acceptable benchmark price for electricity production would have been 12 sen per kWh, said Ani to KiniBiz, which TNB and the IPPs can negotiate around.“But the EPU decided on 16 sen per kWh,” he said to KiniBiz adding that with a take-or-pay clause, the costs jumped to 23 sen. “I said this is ridiculous.”
Another detrimental clause in the PPA was the fixed price for fuel regardless of fluctuations on the open market.
In essence, the PPAs stipulate that IPPs would be paid a fixed capacity payment regularly in exchange for making an agreed electricity capacity available. Should TNB buy the electricity generated, it would then pay energy charges which would also have been fixed in the agreement.
TNB would also be obligated to cover the difference if the price of fuel — used to generate electricity — rises beyond the agreed price in the PPA.
This effectively insulated the IPPs from market forces and guarantees a fixed margin of profit at TNB’s expense, the latter bearing disproportionate risk.
Calling the eventual PPA arrangement ridiculous, Ani refused to sign and subsequently resigned.
“There were many clauses detrimental to TNB (that I couldn’t agree to),” said Ani to KiniBiz. “If I (had) signed, people would have said that I also ‘sapu’ (get a cut),”
It was then-prime minister Mahathir that put him out to pasture, said Ani, for his refusal to play ball. “He (Mahathir) indicated that I should resign within a week of not signing.”
The Pakatan used to make this as such a big big issue over many years saying it loses our country tens or billions in Ringgit every year and alleging that the owners of these power plants so happen to be Mahathir’s close friends or “cronies”.
Here is one of many, many examples : Ketua Menteri Pulau Pinang Lim Guan Eng desak Perdana Menteri jawab skandal subsidi gas yang didedahkan oleh bekas CEO TNB Tan Sri Ani Arope.
But now Pakatan have gone completely quiet on this issue. Why?
The short answer is that Najib had solved this problem. In 2012, actually.
Previously, the now-dead Pakatan Rakyat said it will achieve annual savings of RM3.47 billion on Tenaga Nasional Bhd (TNB) payments to independent power producers (IPPs) if the coalition takes over Putrajaya in GE13 by reducing the Internal Rate of Return guaranteed returns to IPP form 19% to 10%. (see video)
