Wednesday, June 15, 2011

New 1,000MW Power Plant: Where's the Transparency?

Just as the rakyat is simmering over the lopsided deals Independent Power Producers (IPPs) have been enjoying over the past decades, Malakoff Bhd has announced on Bursa Malaysia yesterday that the Government’s regulatory body, Energy Commission (EC) has awarded the concession to build a new 1000MW coal-fired power plant in Tanjong Bin, Johor.

Based on various media reports, prior to the award of the new concession, the Energy Commission chairman, Tan Sri Ahmad Tajuddin Mohd Ali revealted that the commission had sought proposals from 2 power plant operators to construct the power plant, the other IPP being Jimah Energy Ventures Sdn Bhd.

The question on the rakyat’s mind today is, why did the EC invite proposals from only 2 IPPs instead of conducting an open tender to all existing IPPs as well as new potential IPPs in the country? It is obvious that only through a transparent and competitive tender exercise, can the commercial and industrial sector, as well as the man-on-the-street enjoy the most efficiently produced electricity at the lowest possible price.

Malakoff Bhd, a subsidiary of MMC Corp Bhd owned by powerful and influential tycoon Tan Sri Syed Mokhtar Albukhary already operates Southeast Asia’s biggest coal-fired IPP at the existing 700MW power plant in Tanjong Bin, and has now been awarded the concession to build an even bigger plant.

In the light of extensive public interest involved in the deal, the Government through Energy Commission or the Minister of Energy, Water and Green Technology, Datuk Peter Chin must immediately disclose the full details of the concession. In addition, it is crucial for the Government to show why the Malakoff proposal was preferred over the Jimah Ventures proposal.

The Najib administration must prove that the Prime Minister is indeed sincere when he claimed “he is fighting for the people” and not “on the IPP’s side”. The Government must answer question as to how much the coal-powered plant will be subsidised by the Government, the electricity rates to be charged to TNB as well as any formula for future adjustment of tariff rates.

The Prime Minister must also answer to the public and business community why he has repeated broken his promises to hold open and competitive tenders for the biggest projects to be awarded by the Government, such as the RM53 billion MRT, the RM628 million Matrade International Convention Centre, the RM25 billion KL International Financial District and now, Southeast Asia’s largest IPP coal-fired power plant.
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