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.
“You don’t need to go to a fanciful business school to figure out why we need a tariff hike – just revisit the terms given to some IPPs,” he said.
Posts Tagged ‘Price hikes
IPP power price to TNB a rip-off
The morning papers announced that Malakoff is to be awarded a project to build a 1,000 MW power plant. The plant will be given a 15 year concession to sell the power at 25 sen per kwh to TNB. It is enough to make you choke on your roti canai.
Ani Arope had noted with indignation that the IPPs when they first signed the now infamous IPP agreement had been allowed to sell the power at 14 and 16 sen per kwh. And now, amid all the outrage and anger over the electricity tariff hike and the IPPs with their RM19 billion subsidies, the government chooses to do this? The disdain in which they hold the electorate is simply astounding!
In the first place, why a coal-fired plant? It is an inefficient and polluting fuel which is being replaced by wind, water and gas fuelled plants. And why is it even necessary when we have a 42% electricity reserve margin. Let them build plants if they want but only purchase if they supply their electricity at competitive rates, which should be 6 sen a kwh, not a ludicruous 25 sen. The same goes for the rest of these IPPs.
Electricity has just gone up by an average of 7.1% for household consumers. For business it is an average 8.3% hike. However if you use less than 300 kilowatts which would work out to a RM77 monthly bill, you will not be affected.
Which means 75% of household users will not get a higher electricity bill. If you fall into that category, and think this is good news, you would be very wrong. When costs go up for businesses, the cost of their products go up. You will be paying for the business tariff hike. All your essential supplies, and all non-essentials are going to cost more. Nobody is spared.
…TNB had a profit of RM4.1 billion on revenues of RM32 billion in 2010. This is not enough? They still need to raise the electricity tariffs? Why further burden a nation that is already reeling from rising prices. Che Khalib, their CEO, had a big smile on in today’s newspapers. He will get a bigger bonus this year. You will get a higher electricity bill and will pay more for everything else. You will suffer, Che Khalib and his bosses will celebrate. That’s life under the BN’s incompetent, corrupt thumb.
As what can only be considered a joke, TNB’s theme for their 2010 annual report was “Powering A Sustainable Future”! In it, they claim to be committed to ensuring transparency in all they do. In which case, they should immediately make public the IPP contracts. But they will not, because it is clearly a dirty secret. A secret so ugly perhaps, that it alone could cost BN the election. No transparency here, just false slogans. Peter Chin, under whose Ministry TNB is parked, claims that he cannot release the IPP contracts because it is between two private entities. But TNB is not a private entity, it is mostly government-owned. And the subsidies given to the IPPs are not private monies, they are public funds!
Billions “passed through” rakyat
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.
Yeah, and you thought Najib Razak’s acronym laden programmes were too much to stomach…by the time you managed to connect the ETP to the GTP and how it’s intertwined with the EPP which is then managed by the KOPI…
You get the point.
Now, if we could put away this seeming penchant that our PM has for acronym and terminology driven smoke screens, I’d sure like to try to make it plain and simple. Why, just a couple of days earlier, the Energy, Green Technology and Water Minister Peter Chin took a shot at providing an explanation: Hey folks, them subsidies, aren’t really subsidies. Yes sirree… all that happened was that Petronas sold gas below market price to the IPPs and in that process, ended up foregoing RM19 billion worth of profits.
Calls for new TNB-IPP deal
DAP today urged the government to review the agreement that Tenaga Nasional Berhad (TNB) has with independent power producers (IPP), saying it was lopsided in favour of the latter and causing suffering to consumers.
Under the agreement, the IPPs are guaranteed 20% to 22% in returns on investments, according to DAP’s Charles Santiago, the MP for Klang.
“For every RM1,000 they invest, they are assured of profits between RM200-RM220,” he said.
He accused the government of victimising the public in order to maintain subsidies for its rich cronies.
The continued protection of closely-connected Independent Power Producers (IPPs) through the latest hike in electricity tariff by 7.12 percent starting tomorrow has been condemned by Pakatan Rakyat leaders.
Leading the charge is outspoken member of parliament Tony Pua, who said the extra costs on the commercial users would only undermine competitiveness in goods and services.
“The industrial and commercial consumers will bear the brunt of the tariff hike with an average increase of 8.35 per cent in their power bills. This will inevitably fuel further inflation and reduce the competitiveness of our goods and services,” he said in a statement to Harakahdaily today.
Yesterday, the government announced an increase in electricity rate by 2.23 sen/kWh or 7.12 per cent to 33.54 sen/kWh from the current average rate of 31.31 sen/kWh. The hike has been attributed to its decision to review natural gas price in Peninsular Malaysia from RM10.70/mmBTU to RM13.70/mmBTU.
As a result, Petronas will be selling natural gas to power producers at the new rate, drawing an extra RM3 per month until December 2015, when market rates will then apply.
Ministry of Energy, Green Technology and Water Peter Chin claimed the new prices would affect only domestic consumers whose power usage exceeded 300kWh per month, arguing the hike would be by between RM0.07 to RM30.30 every month.
Chin also announced that the government would stop waiving electricity bills for domestic users who record less than RM20 per month, as is currently the practice.
In its reaction, PAS Youth said the hike showed the government was more interested to protect IPPs than the masses.
Continue reading ‘IPP cronies main culprit to our costly electricity’
I chatted with an old patient of mine after a consultation yesterday. He was probably suffering from the side effect of stress and not enough rest. I enquired about his job and he told me that he is working two jobs now; a daytime office job and part- time taxi driving at night. He had to do this to make ends meet.
So I told him what any doctor would tell his patient under these circumstances– to rest more.
Then he started to pour out his woes to me: that he has already been tightening his belt over the past few years, that he dreads to think of ways to tighten it some more, since the cost of living is creeping up and food prices are going to shoot up. He told me that there would come a point that the belt cannot be tightened anymore, and that point is fast being reached.
With so much news on the need to cut subsidies in the newspaper (it was even equated to opium), the government is in fact building up a case to cut subsidies further. It is just a matter of time that subsidies on petrol will be cut further. When that happens, petrol prices as well as electricity tariffs will go up.
It looks like MCA president Chua Soi Lek has decided to play the role of the contrarian. Amid growing calls for Prime Minister Najib Razak to slash the subsidies granted to huge power producer firms controlled by tycoons such Francis Yeoh, Ananda Krishnan and Syed Mokhtar Albukhary, he has opted to stand on their side.
“The government is tied up in a lot of agreements, this cannot just be abolished like DAP says or Anwar says,” Soi Lek told reporters on Wednesday. “Then Malaysia will be seen by the world as a government that does not honour its agreements. That’s wrong.”
Chua was immediately crucified by Pakatan Rakyat leaders who lambasted his “shallow excuses” and slammed him for his uncaring attitude towards the man in the street.
“The agreements that Chua is referring to were very lopsided. But I don’t hear any mention of that. We don’t hear him talk about the cost burden to the rakyat (populace)) at all,” PKR strategy director Rafizi Ramli told Malaysia Chronicle. “
“Neither has he given any suggestion of how to revamp the agreements or offer a solution. Or is it Chua Soi Lek’s intention that Malaysians pay through their noses for the next 10 or 20 years? Is he a leader for the people or is he the self-appointed spokesman for the IPPs?”
Continue reading ‘Chua Soi Lek supports RM19bil subsidy for IPPs?’
The recent dramatic cut in the sugar subsidy was done to benefit an already rich government-owned sugar company, DAP secretary-general Lim Guan Eng said today.
He said the RM116.6 million that the government said it would save from the subsidy cut could be readily offset by the RM232 million in profits reported last year by MSM Malaysia Holdings Bhd, the sugar refining arm of Felda Global Ventures Holdings Sdn Bhd.
“Instead of doing its corporate social responsibility to help Malaysians, especially the poor, Felda would benefit from the RM116.6 million extra to be paid by Malaysians,” said Lim in a press statement.
MSM accounts for close to 60 % of the refined sugar production in Malaysia and is valued at about RM2.3 billion.
“The BN government can easily transfer this RM116.6 million cost to MSM since it is owned by Felda,” Lim said.
Continue reading ‘Sugar price hike to benefit Felda at expense of the poor’
Deputy Prime Minister Muhyiddin Yassin has not come outright and said it but all indications are that there will be price hikes on essential items.
He said that the subsidy burden is expected to double this year from RM10.32 billion to RM20.58 billion.
Muhyiddin said that hefty subsidy costs is taking a toll on the government and that it could not bear the costs. This could be an indication that the government is preparing the public for more cuts.
“The government has continued with its subsidy programme but we cannot continue sustaining the same amount. We have ways to reduce subsidies like the increase in sugar price. We are doing it (subsidy reduction) in stages,” he told reporters here.
“We cannot guarantee there will be no increase in the prices of goods. We cannot control the prices but where the government can intervene to decrease public burden, then we will,” he added.
