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Tolls and hikes short-circuiting Malaysian future

S RAMAKRISHNAN | 12:47PM Jan 2, 2014
Malaysiakini

COMMENT The simultaneous increase in fuel and sugar prices, electricity tariff and toll hikes have got Malaysians worried and bewildered as to how they will manage their household expenses. Compounding matters will be the Goods and Services Tax (GST) that will kick in in 2015. The already weakened ringgit and the sudden withdrawal of subsidies on essential goods will hit hard where it hurts most – the pocket.

Not unlike Marie Antoinette, the prime minister is obstinately insisting that the people can afford these massive hikes. Talk about telling the masses to eat cake, he adds insult to injury by saying these increase are not a burden!

The entire cabinet and prime minister suddenly woke up from their slumber. It dawned on them that the budget deficit, huge public and household debt have to be narrowed. What is shocking is that for 16 continuous years, the deficit and the mounting debt did not raise any alarm bells.

In fact the pro-government economists and mainstream media stoically reminded the rakyat that economic fundamentals were positive and our country is on track to become a developed nation by 2020. But all that propaganda did not convince the world. Fitch Rating Agency, in a startling report, downgraded Malaysia from stable to negative. And the game was up.

The media propaganda failed and even more frightening, instead of being developed Malaysia, by 2020, may be a bankrupt nation!

The acrimonious Fitch report had a jolting effect that aroused the Malaysian government from its deep slumber and self-delusion. It suddenly dawned upon the cabinet that the lies they had believed to be the truth, were, in fact, lies. Continue reading “Tolls and hikes short-circuiting Malaysian future”

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Privatising power – in the people’s interest?

By Tengku Razaleigh Hamzah | 12:52PM Oct 18, 2012
Malaysiakini

COMMENT I have chosen this subject because the privatisation of power, as an economic policy, is a reflection of a fundamental change in our political economy which will have a significant impact on the future of our economy.

In the 1990s, following the lead of the Reagan and Margaret Thatcher policies of encouraging privatisation as an economic policy, it had a very significant impact on Malaysia’s political economy (I have explained this in my speech on Feb 16 at the Selangor Club).

It shifted the role of government as a guardian of public good which has been institutionalised in various public bodies like the Tenaga Nasional Berhad, to private corporations of selected companies.
Continue reading “Privatising power – in the people’s interest?”

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‘Monument of Corruption’ still gets flak

by M Jegathesan, AFP | October 27, 2011
Free Malaysia Today

BAKUN DAM: The first turbine is spinning, electricity is pulsing out, and the water level is climbing in the Borneo jungle behind Malaysia’s huge US$2.2 billion Bakun hydroelectric dam.

But questions continue to swirl around the viability of a project described by critics as a graft-plagued human and ecological disaster – and as opposition mounts against a dozen other planned dams in Sarawak.

The first turbine from French giant Alstom began producing electricity in August and the dam’s reservoir has swelled to the size of Singapore since impoundment began a year ago.

After years of warnings about the impact on Sarawak’s pristine jungles and the forced removal of thousands of local tribespeople, the dam’s head Zulkifle Osman sees light at the end of the tunnel.
Continue reading “‘Monument of Corruption’ still gets flak”

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Guan Eng: RM13b bloated spending shows IPPs protected

By Clara Chooi
The Malaysian Insider
Jun 15, 2011

Lim: The only losers are 27 million ordinary consumers who are not IPPs.

KUALA LUMPUR, June 15 — The Najib administration’s attempt to increase its 2011 budget by RM13 billion is proof of its failure to control spending even after slashing subsidies on daily essentials, DAP’s Lim Guan Eng said today.

The Penang Chief Minister blamed Barisan Nasional’s (BN) “bad governance” for the increasing cost of living in Malaysia, adding that the public was now experiencing “the worst of both worlds”.

“By reducing subsidies, there are inflationary pressure causing prices to rise and hurting the poor. And yet, cuts do not improve efficiency and competitiveness nor cut down budget expenditure as the IPPs (independent power producers) are still allowed to enjoy gas subsidies.

“The only losers are 27 million ordinary consumers who are not IPPs,” he said in a statement today.

Putrajaya tabled a RM13,186,713,000 supplementary supply bill in Parliament yesterday, seeking additional spending in the first half of this year. The amount is an 8 per cent addition to Budget 2011’s RM162,805,323,000, which was tabled last year. Continue reading “Guan Eng: RM13b bloated spending shows IPPs protected”

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The silliness of claiming ownership over wrongs

By Sakmongkol AK47
June 15, 2011 | The Malaysian Insider

JUNE 15 — The problem with Umno goons is that they want to claim ownership on some indefensible issue. This is silly, because people will start viewing Umno as an organisation that stands on the side of abuse, of corruption, of mis-governance and as a party that practises discretionary and arbitrary laws.

Umno is fast becoming a dirty four-letter word.

When someone criticises the scandalous payments to independent power producers (IPPs), their criticisms were taken as attacks on Umno? So what does Umno support?

Umno supports some dubious arrangements to pay the IPPS horrendous prices when the same can be produced cheaper by TNB? Umno stands for cavorting with the robber barons of today? Continue reading “The silliness of claiming ownership over wrongs”

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Subsidies masking IPP ‘inefficiencies’, says think tank

By Lee Wei Lian
The Malaysian Insider
Jun 13, 2011

KUALA LUMPUR, June 13 — Independent Power Producers (IPPs) would have to charge much more than their Singapore counterparts if natural gas were sold to them at market rates, due to their bloated and inefficient cost structures, claimed Research for Social Advancement (Refsa) today.

The think tank estimated that local IPPs would need to raise their average prices from 25 sen/kWh to 74 sen/kWh if subsidies were removed and gas prices were allowed to rise from RM10.70/mmBTU to the present market price of RM47.42/mmBTU.

In comparison, Singapore power producers charge 41 sen/kWh.

“Put simply, if the gas subsidy in Malaysia is completely removed, the IPPs generation cost would be 80 per cent higher than that of power generators in Singapore,” said Refsa executive director Teh Chi Chang, noting that in Singapore fuel prices are market based. Continue reading “Subsidies masking IPP ‘inefficiencies’, says think tank”

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Minister: Soi Lek approved diesel subsidy cuts

S Pathmawathy | Jun 13, 11
Malaysiakini

MCA president Dr Chua Soi Lek did not object to diesel subsidy cuts during the National Economic Council meeting when the matter was decided, revealed Domestic Trade, Cooperatives and Consumer Affairs Minister Ismail Sabri.

Speaking to reporters at the Parliament lobby today, Ismail said that Chua should have raised his concerns during the meeting instead of letting his party leaders complain now through the media.

“How can he now turn back and say it’s not fair? The MCA statement is unfair to government,” he said.

He added that the MCA should be helping the government in tackling protests by C2-class fishing trawler operators because the party had a hand in making the decision in the first place. Continue reading “Minister: Soi Lek approved diesel subsidy cuts”

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IPPs, where’s your social responsibility?

MalaysiaKini
June 13, 2011

‘Why are IPPs hiding behind the non-disclosure clauses? Their position however is comprehensible – they are only protecting their own self-interests.’

IPPs do not benefit from gas subsidy

DannyLoH: What the Association of Independent Power Producers (Penjanabebas) need to explain is why, despite the gas subsidies, our electricity tariff is higher than Thailand, whose producers are purchasing gas at market price?

Paul Warren Penjanabebas, by this letter, you surely have succeeded in ensuring that people only look at the subsidies on the fuel consumed by you. But you did say that your compensation is in two components – fuel and capacity.

And just in case you wish to feign ignorance or lack of understanding, let me put it this way – if one of your members’ capacity is 1,200 megawatts, he gets paid for that 1,200 megawatts.
Continue reading “IPPs, where’s your social responsibility?”

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Guan Eng: royal commission on IPPs, PPAs

Malaysiakini
Jun 12, 11

DAP secretary-general Lim Guan Eng has challenged the BN-led foreign government to set up a royal commission of inquiry into the issue of independent power producers and the related matter of power purchase agreements (PPA).

In this way, all PPAs and other PPAs would be disclosed and it could be determined once and for all whether the government has been equitable in its energy subsidy cuts for end consumers while maintaining lopsided arrangements with the IPPs that supply power to utility firm TNB, said Lim.

Lim, who is also Penang chief minister, was echoing an earlier statement by Umno stalwart Tengku Razaleigh Hamzah that an RCI should be set up to review TNB’s contracts with the 26 IPPs currently producing about 60 percent of the TNB’s energy supply.

“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,” said Lim in a statement today. Continue reading “Guan Eng: royal commission on IPPs, PPAs”

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Cabinet forms panel to study power deals

The Malaysian Insider
Jun 12, 2011

KUALA LUMPUR, June 12 — Following growing calls for power purchasing agreements to be reviewed, Datuk Seri Ahmad Husni Hanadzlah today announced that a Cabinet committee has been formed to evaluate the matter.

“The committee will study various aspects (of power supply) and not just the [independent power producers] problem… among them (production) costs and (requirements for) the future because there are IPPs whose concession is due to end in 2014 and 2015,” Ahmad Husni was quoted by Bernama Online today.

The second finance minister also stressed that the committee will take a birds-eye view of subsidies and not be focussed primarily with the power deals or the producers.

“We have not been given any deadline for submitting the report, but what must be stressed here is that it will give priority to the interests of the people,” he said.

It remains to be seen if the committee will be enough to assuage lawmakers calling for a royal commission of inquiry (RCI) to probe the lopsided power deals between Tenaga Nasional Berhad (TNB) and the IPPs. Continue reading “Cabinet forms panel to study power deals”

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Ku Li calls for RCI on power deals

The Malaysian Insider
Jun 10, 2011

KUALA LUMPUR, June 10 — Veteran politician Tengku Razaleigh Hamzah today called for a royal commission to probe Tenaga Nasional Berhad’s contracts with independent power producers (IPPs), saying the lopsided deals may be burdening consumers.

“The commission must investigate and propose the best suitable measures to be taken by the government to ease the burden to be borne by the consumers following the inevitable increase in the electricity tariff after the IPPs charged higher rates to TNB,” the Gua Musang MP was quoted by Bernama Online today.

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. Continue reading “Ku Li calls for RCI on power deals”

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The bigger subsidy addicts

By Sakmongkol AK47
June 07, 2011 | The Malaysian Insider

JUNE 7 — The favourite 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. Continue reading “The bigger subsidy addicts”

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Respond to Ani’s expose, Najib told

By Teoh El Sen
June 6, 2011 | Free Malaysia Today

PENANG: The DAP has demanded that Prime Minister Najib Tun Razak explain why the public must suffer high electricity tariffs when the government could cut its subsidy bill by undoing the so-called “gas subsidy scandal” recently exposed by former Tenaga Nasional Bhd (TNB) chief Ani Arope.

Referring to Ani’s allegation that the Economic Planning Unit (EPU) forced TNB to accept lopsided purchase deals with independent power producers (IPPs) nearly 20 years ago, DAP secretary-general Lim Guan Eng said a review of those deals would be “more than sufficient” to reduce the subsidy bill.

“Clearly, there is no justification for Putrajaya to hike electricity tariffs by 7%,” he said.

Ani said in a recent Facebook posting that the EPU bullied TNB into buying electricity from an IPP at 14 sen per kilowatt hour (kWh) despite an existing offer of 12 sen. Continue reading “Respond to Ani’s expose, Najib told”

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Pua wants Najib to reveal power deals now

By Debra Chong | June 02, 2011
The Malaysian Insider

KUALA LUMPUR, June 2 — Citing legal precedents, DAP lawmaker Tony Pua told the prime minister today to stop dithering and immediately declassify the contentious power purchasing agreements (PPAs) inked with independent power producers (IPPs).

Datuk Seri Najib Razak said on Tuesday the government would look into making public the contracts between national utility company Tenaga Nasional Berhad (TNB) and the IPPs in the face of mounting criticism.
Continue reading “Pua wants Najib to reveal power deals now”

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Pass through… What??

By Shanker | June 01, 2011
The Malaysian Insider

JUNE 1 — I refer to the prime minister’s statement that independent power producers (IPPs) would not benefit from a power hike, as he’s quoted by The Malaysian Insider — “It is a pass-through tariff so nobody benefits.”

Er… what’s “pass through”? Could someone please explain in plain English, what is this new terminology? For the life of me, it sure seems to have escaped the notice of renowned economic and financial experts; don’t think you’d find it in anything that, say Paul Krugman, writes.
Continue reading “Pass through… What??”

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People come first – reveal the power agreements

Malaysiakini Your Say

‘If Mahathir could compel them to sign the deal with IPPs at a giveaway rate, why can’t they be asked to similarly disclose the agreements?’

Minister: Gov’t has no power to reveal IPP contracts

Swipenter: This is one of the many ways the Umno-led government abuse and misuse OSA (Official Secrets Act) for the self interests of their cronies in the privatisation of essential utilities.
Continue reading “People come first – reveal the power agreements”

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Gov’t a monster at times, a mouse at others

Malaysiakini Your Say

‘Peter Chin’s statement that ‘the government has got no power to reveal IPP contracts’ sounds like the lamest excuse given by any politician.’

Minister: Gov’t has no power to reveal IPP contracts

Susah Kes: Funny. For a government that places people under the Internal Security Act, uses police or judiciary powers to suit its whims and fancies, has no qualms about hijacking state governments, has enough thick skin to try and bribe voters, and is not shy in booting Anwar Ibrahim out of his position as DPM in an atrocious manner, Energy, Green Technology and Water Minister Peter Chin’s statement that the “government has got no power to reveal IPP contracts” sounds like the lamest excuse given this year by any politician.
Continue reading “Gov’t a monster at times, a mouse at others”

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DAP: IPP deals bleed consumers, fuel tariff hikes

Malaysiakini
May 31, 11

The DAP has hit out at the federal government for raising the electricity tariff but without first restructuring the lucrative independent power producers (IPP) sector.

Currently, IPPs are charging Tenaga Nasional Bhd (TNB) high prices despite facing relatively low production costs, DAP publicity chief Tony Pua said in a statement today.

“And the key reason for this is the unfair power purchase agreements (PPA) which result in ridiculously high levels of electricity reserve margins.

“According to TNB, our reserve margin was 54.6 percent in 2008 and 52.6 percent in 2010, which is double that of Thailand and Java, Indonesia, at 25.4 percent and 26 percent respectively.

“The net effect is TNB is forced to purchase electricity it does not need from the IPPs, resulting in inflated costs for TNB and correspondingly inflated profits for the IPPs,” Pua (right) said. Continue reading “DAP: IPP deals bleed consumers, fuel tariff hikes”

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Economists see higher inflation from energy hikes

By Lee Wei Lian
The Malaysian Insider
May 30, 2011

Power tariffs will be increased by 7.12 per cent on average come June 1. — Reuters picKUALA LUMPUR, May 30 — Economists expect today’s price hikes in electricity and natural gas to be passed through to inflation-weary consumers, possibly pushing up the monthly consumer price index (CPI) by as much four per cent in the next few months from 3.2 per cent in April.

This follows the announcement from Putrajaya today that the electric tariff will be raised by 2.3 sen per kilowatt hour (kWh) or an average of 7.12 per cent while the price of natural gas charged by Petronas for power generation will go up by RM3.00 per mmBtu each six months until it reached market levels.

“I wouldn’t be surprised if the monthly inflation rate from June through to the third quarter approaches four per cent,” said Maybank Investment Bank chief economist Suhaimi Illias. “People also forget that effective next month, the diesel super subsidy will also be removed which will impact the cost of logistics.”

He added that there could be a risk to consumer spending from higher inflation but said that the country’s economic growth should remain intact. Continue reading “Economists see higher inflation from energy hikes”

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Power rates up 7%, gas price to be floated

Kuek Ser Kuang Keng | May 30, 11
Malaysiakini

The federal government has raised electricity tariff by an average of 7.12 percent beginning June 1 as part of its subsidy reduction exercise.

The average rise is 2.23cent/kW unit, from the current average rate of 31.31 to 33.54cent/kW unit.

Natural gas prices are also set to rise by RM3 per mmBtu every six months until it reaches market levels by 2016, when its price would be fully floated.

Domestic users who use less than 300kW unit per month will not be subjected to this new electricity pricing scheme, which is multi-tiered according to usage. Continue reading “Power rates up 7%, gas price to be floated”