Wednesday, June 08, 2011

BN Government "Powerless" to Protect Rakyat

The reluctance of the Government to make public the PPAs shows that it is "powerless" when needed to protect the interest of the rakyat, but "powerful" where maximising the profits of IPPs are concerned

The Minister of Energy, Water and Green Technologies, Datuk Peter Chin had earlier in the week expressed that the Government is helpless in "declassifying" the Power Purchasing Agreements (PPAs) between the Independent Power Producers (IPPs) and Tenaga Nasional Bhd (TNB) in the light of the demand by the public.

The Ministry's reply to me back in 29 February 2009 for my parliamentary question said the exact same thing, which at the very least showed that they are steadfast and consistent in backing the interest of the IPPs.

The Minister then had replied to me that "dokumen Perjanjian Jual Beli Tenaga (PPA) merupakan satu dokumen perjanjian antara dua entiti swasta, iaitu di antara Tenaga Nasional Berhad (TNB) dan pihak penjana bebas (IPP) yang terbabit. Di bawah perjanjian tersebut, kedua-dua pihak perlu memberikan persetujuan terlebih dahulu sebelum mana-mana kandungan perjanjian tersebut boleh diumumkan. Sekiranya pihka TNB bercadang untuk menamatkan perjanjian PPA tanpa sebab yang kukuh, TNB perlu memberi pampasan penuh kepada pihak IPP."

The Ministry's reply to me on 23 March 2010 again emphasized the Government's sheer reluctance to right the wrong in the PPAs which make the rakyat pay significantly more for its electricity.

"Kerajaan sentiasa menghormati sebarang perjanjian atau kontrak yang telah ditandatangani oleh pihak Kerajaan. Oleh yang demikian, Kerajaan tiada rancangan untuk merombak semula atau menamatkan kontrak Perjanjian Pembelian Tenaga (PPA) secara unilateral dengan pihak IPP sebelum tamat tempoh kontrak tersebut. Sebaliknya, pendekatan yang diambil oleh Kerajaan ialah supaya PPA tersebut dirundingkan semula.Memandangkan rundingan semula PPA merupakan perkara yang rumit dan memerlukan tempoh masa yang agak lama untuk menentukan hasilnya, ia akan ditangani secara berasingan."

The "powerless" nature of the BN government when it comes to declassifying and renegotiating the PPAs, is in direct contrast to the "powerful" role it played to ensure that the IPPs were ensure astronomical profits.

In a revealing interview published by The Star on 26 June 2006, former TNB chairman, Tan Sri Ani Anope who was "involved" in the power agreements with the IPPs had said:

"There was no negotiation. Absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the EPU. And we were harassed, humiliated and talked down every time we went there. After that, my team was disappointed. The EPU just gave us the terms and asked us to agree. I said no way I would."

As for the pricing and terms of the contracts, "It was all fixed up. (They said) this is the price, this is the capacity charge and this is the number of years. They said you just take it..."

Hence when TNB was forced to sign these lobsided PPAs, it was the Prime Minister's all-powerful Economic Planning Unit (EPU) which dictated all terms. But when it comes to making public these PPAs, its now TNB's own choice as a "private company" and there's not the Government can do about it.

The responses from the Minister are at best "misleading" and at worst a lie, for the Government has a vested interest in not declassifying these contracts, for it was the BN government itself who dictated the terms of these contracts to be signed. Now it just does not want the public to know what it did, and the fact that it prioritised the astronomical profits of these IPPs at the expense of the man-on-the-street.

In fact Tan Sri Ani Anope disclosed that an agreement has been struck between TNB and an IPP, understood to be Genting Sanyen for the former to purchase electricity at 12 sen per kWh. However the "EPU said that unless the IPP raised its price, the contract would not be given to the IPP. So he got it for 14 sen per unit," while other first generation IPPs got 16 sen per kWh.

Now that the interest of the IPPs have been served, the Government reverts to its meek and timid role using the excuse that its an agreement between "private entities" and that any renegotiations can only be done after the existing contracts expire.

On the contrary, as there is no "contract" between the Government and the rakyat, the Government can choose to raise electricity tariffs any time it so chooses, even if it were to mean that these IPPs were to continue to profit at the expense of increased sufferings of the rakyat.

The Prime Minister, Datuk Seri Najib must demonstrate moral and economic leadership by doing what is right and just for the people, instead of dithering over the declassification of the PPAs as well as their renegotiation. Otherwise, all the rhetoric of "transformation" becomes just a facade for continuity and business as usual, where political cronyism comes first.
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