Economics: Subsidies - Electricity Price No Drop Despite Fuel Price Drop

[pywong]

Price going up is easy to justify but when fuel price drop, TNB have all sorts of reasons to justify why they shouldn't drop the electricity rates.

http://www.bernama.com/bernama/v3/news_lite.php?id=365124

Can't Bring Down Electricity Tariff As Coal Price Remains High, Says TNB CEO
October 16, 2008 22:23 PM

KUALA LUMPUR, Oct 16 (Bernama) -- Tenaga Nasional Bhd (TNB) says it cannot
reduce the electricity tariff as coal price, which accounts for 60 percent
of its power generating cost, has remained above US$75 per metric tonne.

The tariff hike on July 1 was based on the US$75 price.

Its president and chief executive officer, Datuk Seri Che Khalib Mohamad Noh
said 60 percent of power was generated from its gas power plant and 30
percent coal, but in terms of cost, coal took up 60 percent and gas 40
percent.

"A 10 percent increase in coal price would mean six percent increase in fuel
cost," he told reporters after announcing TNB's financial performance here
today.

Its pre-tax profit for the year ended Aug 31, 2008 declined by RM1.74
billion to RM3.02 billion compared with RM4.7 billion previously.

Che Khalib said the high cost of operation was the reason why even with the
recent tariff hike, the utility giant registered a pre-tax loss of RM275.2
million for the fourth quarter ended Aug 31, 2008 compared with a gain of
RM329.5 million in the same quarter of 2007.

"We registered a loss despite the tariff increase by 26 percent because fuel
cost alone increased by RM1 billion."

A main feature of the tariff structure is a "lifeline tariff rate" where
household consumers whose monthly power consumption was up to 200kWh would
see no change in the rates. This group of consumers represents 59.1 percent
of households.

A further 26.7 percent of total household consumers with monthly consumption
of 201 to 400 kWh are expected to see one percent to 11 percent increase in
their monthly electricity bill.

He explained that the tariff hike was based on coal price of US$75 per
metric tonne but the average price during the financial year was US$76.

"Even though the coal price has come down from US$150 to US$120 on average,
it is still way above the price that was used for the tariff hike."

Effective June 4, the government raised the gas price to RM14.31 million
british thermal unit (mbtu) from RM6.40 mbtu. Gas sold to TNB by Petronas
has been subsidised at RM14.31 mbtu compared to the actual price at RM30 per
mbtu.

"So, we admit that oil price has come down but people must understand that
the coal price did not come down as much," he said.

Che Khalib said, TNB has not locked in its coal need for 2009 and 2010 yet
due to the volatility in the coal price.

"They say the only way the coal price is going to move is north and buyers
like us we wouldn't want to lock in the price when the prices are going up."

TNB, he said has only locked in its coal needs for September to December
2008 period at US$116 per metric tonne. -- BERNAMA

[pywong]

Petrol price down; electricity tariffs still the same
l
Posted by admin
Wednesday, 07 January 2009 15:02

The crude oil price is now close to US$50 per barrel. The price of natural gas has plunged since July 2008. Coal, which at one time was US$192/tonne, is now hovering around US$80/tonne.

Earlier when the prices were soaring, Tenaga Nasional hiked its electricity tariffs on 1 July 2008.

The electricity tariff hike was to cover the gas price increase and to partially offset the rise in coal prices, which had also gone up 170% since 2007, said the TNB chief back then.

Now that fuel prices have fallen, blog reader Desmond is wondering why TNB hasn’t reduced its rates.

When the fuel price went up, Tenaga said their cost had gone up and it hiked the electricity tariff.

Now petrol and gas prices have dropped and even fuel oil and transport costs, shipping charges for coal delivery, and the price of coal itself has gone down in the world markets but why is the Tenaga electricity tariff still so high when it should have gone down as well?

Something is not right here.

http://mt.m2day.org/2008/content/view/16700/84/

[pywong]

Good article by Lee Wee Tak.


Author: Lee Wee Tak | Posted at: 5/17/2011 09:24:00 PM | Filed Under: Economy, Lee Wee Tak, livelihood of yours and mine, submarines, subsidy
http://www.freemalaysiatoday.com/2011/05/17/fuel-subsidies-like-opium-to-be-cut-gradually/

There was no more jovial cosmetic joking on the radio about Manchester United, late tweeter nights that piss the missues off this time from the Prime Minister.

----------------------------------------------------------------------------
Fuel subsidies, like opium, to be cut gradually
May 17, 2011

Prime Minister Najib Tun Razak says the estimated cost of fuel subsides for this year had soared from RM11 billion to RM18 billion.

OXFORD (England): Fuel subsidies are “like opium” to the Malaysian economy and will have be reduced gradually to bring the budget deficit under control, Prime Minister Najib Tun Razak said yesterday.

He said his government had budgeted for fuel subsidies to cost the economy RM11 billion this year but that the estimate had soared to around RM18 billion because of high international crude oil prices
-----------------------------------------------------------------------------

Apart from failing to mention that being addicted to (and jealously & irrationally guarding) uncompetitive handouts from public funds is also an opium that breeds complacency, extremely unhealthy work culture and credit worthiness, what is glaringly missing from 1Malaysia Prime Minister's (previously known as “Change Your Lifestyle DPM”) explanation is how much additional revenue Petronas is enjoying, and how much dividend Petronas can and have to pay to the Federal administration.

So out of desperation to find out if the doomed Malaysian consumers can be saved, I spent an hour in the Internet and manage to present some areas where savings at least equalling to the subsidy expense can be made. Let's see if a broken down accountant with bad eye sights can offer any suggestions:

http://4.bp.blogspot.com/-jX-yJNTQKo4/TdJ3kKcrXsI/AAAAAAAAAig/lAfjmFTclms/s400/cuttable.jpg

1) we probably do not need some fancy Cougar Armour Personnel Carriers which gobble up RM7.5 billion over 10 years, that will save us RM750 million a year.

-----------------------------------------------------------------------
http://www.malaysiandefence.com/?p=1417

The Cougar project has just started while the SGPV/LCS project will be signed, most probably, at Lima 2011 at the end of the year. Again as I had mentioned I am wary of having the government announcing the ceiling budget for any project under negotiations as the final price had always tracked the approved budget. In this case, the LOI was worth RM8 billion and the LOA (contract) is RM7.5 billion, a discount of RM500 million.

----------------------------------------------------------------------

The greatest threat we are facing now are probably candle holders, black coffee drinkers, cross country cyclists, people who want to give a teddy bear as a birthday gift, people who lay down on their faces protesting against poison plants etc. Or maybe some idiot with a loud month yelping senseless, outdated and definitely irrelevant provocations from Kelantan to Gombak recently or some lunatic who fancies himself as a respectable journalist or editor.


2)Subsidies paid by Tenaga (recovered from consumers) to IPPs which the then CEO objected and subsequently was retired from his position.

----------------------------------------------------------------------------
http://semutfire.blogspot.com/2009/11/pengeluar-tenaga-bebas-ipps-sebenarnya.html


Menurut 1 temuramah akhbar The Star dengan bekas CEO TNB, Tan Sri AniArope. Semasa perjanjian pembelian tenaga (Power Purchase Aggrement –PPA) di buat. Dia hanya diberi seperti, ini harganya, ini jumlah tenaganya dan ini jumlah tahunnya, kamu hanya perlu setuju sahaja. [6]. PPA yang berat sebelah antara IPP dan TNB itu dikatakan menjadi punca Tan Sri Ani meletak jawatan sebagai CEO TNB. Dalam temuramah tersebut, Tan Sri Ani berkata – TNB dipaksa untuk menerima harga yang ditetapkan oleh IPP
----------------------------------------------------------------------------

Base on the latest audited accounts of TNB, RM12 billion was paid to these IPPs (Incredibly Profitable Privateers)in 2010

http://4.bp.blogspot.com/-PzqJ61RR1Go/TdJ3j0N48wI/AAAAAAAAAiY/gC881hvgqBQ/s400/tenaga%2Bnotes%2Bto%2Baccounts.jpg

Note at the bottom, "purchase from IPP"; note 5 of Tenaga Berhad's audited accounts 2010


3) Toll compensation paid to Plus Engineering Berhad which in substance is a tax payers' guarantee to the annual dividends declared by the company to its shareholders as the amount of compensation received (RM777 million) correlates nicely to total dividends paid on 18 May 2010 and 24 September 2010 totalling RM875 million.

http://4.bp.blogspot.com/-wbf_WsVH_nk/TdJ3jQtKsII/AAAAAAAAAiQ/wTqWvVQi7wc/s400/Plus%2Bexpressway%2Bcompensation.jpg

compensation paid by the government (i.e. tax payers like you and me) to Plus Engineering Berhad; note 5 of it's audited accounts 2010

http://1.bp.blogspot.com/-NXRFbV0O2G0/TdJ3iz8JViI/AAAAAAAAAiI/4cb5Jpud_og/s400/dividends%2Bpaid%2Bby%2BPlus%2B2010.jpg

note the dividend paid by Plus Engineering Berhad as mentioned in note 14 of it's audited accounts 2010, almost the same amount as the compensation. Since when tax payers' are suppose to pay dividends to private investors?


4) Now why does a single Prime Minister Department needs so much money for? Isn't it suppose to be "kepimpinan melalui teladan"? Leading by example is a much appreciated form of leadership, especially from some one who famously and correctly tell people to "change their lifestyle". The allocations for PM department in 2011 budget bloated up to RM15.8 billion. (refer http://en.liewchintong.com/?p=835)


Previously in 2005, the PM's department budget was RM4.1 billion (Source: The Budget - How the government by spending our money by Teh Chi-Chang)

So lifestyle definitely changed and for the better for certain people! Surely halving the allocation to benefit all Malaysians to a tune of RM7.9 billion rather than selected individuals and exclusive contractors make sense, right?


5) What do we need submarines for? They are no good for chasing pirates and I simply do not see the need for potential sinking coffins in our defense needs - against pirates, peaceful protesters, possible armed lunatics hiding in the natural or concrete jungles. Maintenance cost alone of RM290 million can be saved, even excluding the purchase cost, some dodgy commission which attracted interest from north of China to south of England. (OI did not say the "M" word)



6) if even your own staff do not buy your products and services base on an advertisement that does not reflect the actual quality and substance of your product and services, one should not engage the consultant and professional advertiser in the first place.

the great 1Malaysia sales pitch have been shredded to pieces smaller than micro bikinis by one's own brochure editorial team, own's lietenants, one's outsource contractors etc

No point advertising something that your team do not internalised and associate with, let alone deliver it. Better to save the money, do not advertise and buy some petrol or sugar with it instead---lah!


Well I think I clock up RM22 billion within the hour. Too bad none of it is coming my way, not in a million years!

[pywong]

How Much Fuel Hike Will It Be – 5 sen, 20 sen, 40 sen or None? (http://www.financetwitter.com/2011/05/how-much-fuel-hike-will-it-be-five-sen-twenty-sen-fourt-sen-or-none.html)

May 25 2011
Next month will be the Judgement Day for both consumers and the Malaysian government. The petrol price hike is almost certain. The only question is by how much will the government increase RON95 after its brother RON97 was increased by RM0.20 a liter early this month. Another interesting event is whether the government would lower the price of RON97 considering the global crude oil has consolidate to below $100 per barrel.

The government has given multiple warnings that the RON95 will increase by painting how painful the government is surviving by subsidizing the fuel. Gosh, some Malaysian ministers almost cry as if this country is the only one subsidizing fuel prices. While the government was having easy time in deciding the 20 sen increase on RON97, the same cannot be said about RON95 because an estimated 80% consumers are using this type of fuel, which accounted for 30% of the total fuel subsidy.

If history were to repeat itself, the total fuel subsidy in 2008 was about $17.5 billion and now Najib’s administration is set to carry the burden of about $18 billion, if current fuel price remains. This is more than the initial budget of RM10 billion subsidy based on the assumption the global crude oil will not go above $90 a barrel. Guess God has his funny way of playing jokes on the current government.

http://www.financetwitter.com/wp-content/uploads/2011/05/Fuel-Hike-Protest1.jpg

Fortunately PM Najib’s predecessor, Abdullah Badawi, has shown a classic example on how to lose a general election, well, almost. Badawi hiked the fuel price by a whopping 40.62% from RM1.92 a liter to RM2.70 a liter back in 2008, and the rest is history. However one has to remember that while Badawi did the unthinkable, consumers were reimbursed in cash amounted to RM625 rebate for cars below 2,000 cc and RM125 for motorcyclist.

Almost instantly the food prices and inflation spiked thereafter. Last month, the government claimed the actual price of RON95 was RM2.77 a liter against the current pump price of RM1.90 a liter. To increase from RM1.90 a liter to RM2.77 a liter or about 45% increase will push Najib on top of “Bravest Souls” chart. Of course Najib won’t perform such a heroic act, not that he dares in the first place.

How does the government determine or calculate petrol prices? It is using something called APM (automated pricing mechanism) formula of which the core is MOPS (Mean of Platts Singapore) – referring to the mean price of oil traded through Singapore as per the data from Platts, a provider of energy and metals information. Add other variables such as oil company margin, station dealer profit, sales tax, operation cost and alpha; and you’ll get the fuel price.

http://www.financetwitter.com/wp-content/uploads/2011/05/How_Fuel_Petrol_Prices_Determined.jpg

In short, it was said that an increase of $10 a barrel would result in a 19 sen a liter price hike of RON95. The government phased out RON92 and introduced RON95 on Sept 2009 when the crude oil was at $70 a barrel. The price of RON97 was then increased from RM1.80 to RM2.05. So using the same arithmetic and Sept 2009 fuel price as benchmark, the price of RON97 should be at about RM2.62 (19 sen x 3) when the crude oil hit $100 ($10 x 3) a barrel. Will the government reduce RON97 to RM2.65 or RM2.60 a liter next month since the crude oil is below $100 a barrel?

We know the price of RON95 will go up next month but we won’t know the quantum. Heck, even the government is scratching their heads now in determining the amount to be hiked. AmResearch predicted RON95 and diesel would go up as much as 20 sen next month, a fair prediction I would say. If the increase is minimal of between 5 sen to 10 sen a liter (of which the government can save RM650 million to RM1.3 billion) then you can put all your money that Najib is going to call a snap election next month (*grin*). At RM2.10 (20 sen increase) a liter, people would grumble but not to the extent of taking it to the street.

Still, this provides sufficient ammunitions to the opposition in the coming snap election. One has to remember that ever since the petrol price was increased from RM1.92 to RM2.70 in 2008, the prices of food, transportation, raw materials and whatnot escalated to new height and never came down thereafter, even though the petrol price had been reduced subsequently to the lowest of RM1.80 on Dec 2008. If the inflation remains the same even after a 20 sen hike on RON95, then Lady Gaga is still a virgin.

http://www.financetwitter.com/wp-content/uploads/2011/05/Malaysia-Petrol-vs-CrudeOil.png

Government’s argument that it can’t continue to subsidise the fuel price has its logic and makes perfect sense. But it doesn’t explain why the government was silent on the gigantic subsidy of a whopping RM19 billion currently enjoyed by IPPs (Independent Power Producers), most of them cronies who contribute to the government’s war-chest. Spin as you like but a subsidy is still a subsidy and you can’t call it another animal because Petronas was obviously selling gas way below market price to the IPPs.

And what would stop the government from hiking fuel price RON95 at all? The only obvious answer is the snap election will definitely be this year and it will be so near you can smell it. If there’s no price hike at all, including electricity, water, gas and so on, then you’re possibility looking at a snap election before the 2012 Budget. The fact that Goldman Sachs predicts that the crude oil would escalate to $140 a barrel from earlier projected of $120 a barrel for the year 2012 is a strong concern enough to trigger Najib’s camp into panic mode.

The game is getting riskier as Najib administration is juggling between refilling its empty coffer from subsidies (and corruptions) without hiking fuel price (as the crude price fluctuates every day) and determining the best date to call a snap election. It seems his lucky date of 11-11-2011 is so near yet so far. Isn’t it fun looking at how artificial pricing in the name of subsidy and corruption are slowly eating into a corrupt government itself?

Update: Government has decided to maintain the prices of RON95 petrol, diesel and gas. Snap Election before October 2012 Budget?

[pywong]

It's ok. Either change your lifestyle and learn to eat cake (http://www.phrases.org.uk/meanings/let-them-eat-cake.html)or change the Ruling Party.



Power rates up 7.12% (http://www.malaysia-today.net/mtcolumns/newscommentaries/40779-power-rates-up-712-)


NEWS/COMMENTARIES
Tuesday, 31 May 2011

By Karen Arukesamy, The Sun

PUTRAJAYA (May 30, 2011): Households that use 300 kilowatt hour (kWh) or less of electricity a month will not be affected by the higher tariff effective Wednesday, June 1. This means if your monthly bill is RM77 or less, there’s no change.

“The average electricity tariff will be increased by 2.23 sen/kWh or 7.12% from 31.31 sen/kWh to 33.54 sen/kWh,” Energy, Green Techno-logy and Water Minister Datuk Seri Peter Chin Fah Kui told a press conference today.

He said all domestic consumers with a monthly consumption of up to 200kWh (lifeline band) and the next 100kWh will not be affected.

“Domestic consumers in these bands will continue to enjoy the subsidised unit rate of 21.8 sen/kWh and 33.4 sen/kWh respectively.

“Domestic consumers in the 301 to 400 kWh per month band will experience minimal electricity bill increase (0.1%-6% or 7 sen-RM6.60),” he said.

Consumers whose monthly power bill is RM77 and below form 75% of the population. The other 25% will have to pay RM6 more (see table).



The 7.12% increase comprises:

* 5.12% or 1.60sen/kWh due to higher natural gas price to the power sector from RM10.70/mmBTU to RM13.70/mmBTU in line with the increase in global energy prices; and

* 2% or 0.63sen/kWh for Tenaga Nasional Bhd to partly recover the increase of electricity supply cost since the last base tariff revision in June 2006.

“There will an additional 1% imposed on the monthly bill as the Feed-in-Tariff (FiT) to promote renewable energy fund to bear the additional cost. However, domestic consumers who use less than 300kWh/month will be exempted,” he said.

The tariff review package also provides the following special rates and discounts:

* 10% discount on electricity bills enjoyed by local schools and higher learning institutions, places of worship and welfare homes registered with the government; and

* 10% discount extended to partially government-funded educational institutions.

Industrial consumers will experience an average increase of 8.35% (ranging from 6.2% to 10.3%), he said.

Chin said the main rationale for the tariff revision was the higher price of natural gas supplied to the power sector effective Wednesday.

“The increase in natural gas price is unavoidable due to the increase in global energy prices since 2009 and is based on the government natural gas pricing mechanism in which the price is periodically reviewed in tandem with market price trend.

“Since natural gas cost constitutes around 54.2% of the total fuel cost mix (FY2010), the additional fuel cost incurred due to the gas price revision is reflected via the increase in end-use electricity tariff,” he said.

Announcing the increase in the natural gas price earlier at the same press conference, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said gas prices were determined based on their alternative fuel pricing.

“For example, if fuel oil is used in power generation and if gas is used to replace fuel oil as an energy source, then the price of gas will be the same as that of fuel oil. The practice of pricing gas relative to its alternative fuels has been adopted in all countries in the region,” he said.

[pywong]

Ani Arope blames high power tariffs on ‘Economic Plundering Unit’ (http://www.themalaysianinsider.com/malaysia/article/ani-arope-blames-high-power-tariffs-on-economic-plundering-unit/)


By Debra Chong
June 03, 2011


KUALA LUMPUR, June 3 — Former Tenaga Nasional Berhad (TNB) chief executive Tan Sri Ani Arope is blaming the Economic Planning Unit (EPU) for rising electricity tariffs, saying the powerful agency forced the national power company to sign lopsided purchase deals nearly 20 years ago.

http://www.themalaysianinsider.com/images/uploads/2011/june/03/aniarope-facebook-400.png

Ani said EPU, which he sarcastically dubbed "Economic Plundering Unit", forced Tenaga to buy electricity from an independent power producer (IPP), believed to be Genting Sanyen, at 14 sen per kilowatt hour (kWh) despite an existing offer of 12 sen/kWh then. Other IPPs then were charging 16 sen/kWh Genting Sanyen became the first IPP to transfer 15 million watts (MW) in electricity to TNB’s national grid on April 15 and is scheduled to complete a RM1.8 billion upgrade on its existing gas-fired plant with a capacity for 720 MW by June next year.

“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,” Ani, who helmed the utility company between 1990 and 1996, said in his last Facebook posting three days ago.

“With the take-or-pay clause and with the 40 per cent excess reserve that we have today, one only has to produce half of one’s capacity and be paid 80 per cent of the agreed capacity. Well done the then-EPU — Economic Plundering Unit,” he added, mocking the economic unit under the Prime Minister’s Department.

Ani called for a review of the original terms with the IPPs as the storm over energy price deals continues to build up.

DAP publicity chief Tony Pua cited today Ani’s 2006 interview with English daily, The Star, to increase pressure on the federal government to declassify the power purchase agreements (PPAs) inked between TNB and the IPPs.

Ani caused a stir 15 years ago when he chose to resign from his executive chairman post rather than sign the imbalanced deals, which saw the first generation of IPPs created, such as YTL Power Services, Powertek and Malakoff during the Mahathir administration.

“TNB is the whipping boy. TNB has no control of the price it has to pay to the IPPs. Get to the source of the problem,” said the Penang-born now in his early 80s.

The Najib administration has been savaged for allegedly protecting the interests of IPPs rather than the public.

Putrajaya announced the 7.12 per cent hike in electricity rates in an effort to trim a subsidy bill that would otherwise double to RM21 billion this year and promised the hike will not affect 75 per cent of domestic consumers.

But power prices will now rise by as much as 2.3 sen per kWh in areas taking TNB’s electricity supply, a potential source of public anger just ahead of a general election expected within the year.

The Star daily reported today the government was close to inking a deal for a 1000 MW coal-fired plant in Manjung which will charge 25 sen/kWh.

[pywong]

Another smash and grab.

Saturday, 04 June 2011 01:59
Syed Mokhtar and the BN's 25 sen Rip-Off (http://malaysia-chronicle.com/index.php?option=com_k2&view=item&id=13549:syed-mokhtar-and-the-bns-25-sen-rip-off&Itemid=2)


Written by Ismail Dahlan, Malaysia Chronicle

http://malaysia-chronicle.com/media/k2/items/cache/c4ce39297a65f7629fa7ce9a4b8c1f15_XL.jpg

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.

UMNO's crony system

http://scwatch.files.wordpress.com/2011/06/112bboss2bipp.jpg?w=350&h=280

MMC, Malakoff’s parent company, is owned by Syed Mokhtar, who is one of the richest businessman in Malaysia. This deal will make him richer still. He already owns at least 6 IPPs in Malaysia, all with agreements which make them no-lose enterprises.

The full details of what those agreements net Syed Mokhtar; the government is not willing to reveal. Transparency is not their cup of tea, especially when the truth is ugly.

This seems to be what big business is all about in Malaysia. Be closely connected with the Prime Minister or the powers-that-be, bankroll them perhaps, and they will hand you public money through the back door. In other words, cronyism!

But the brazen nature of this deal, coming in the middle of severe public discontent over the tariff hikes, stands out even in Malaysia. Wiser men would have laid low for a while.

The philosopher might wonder at the avariciousness of man and the never-ending desire for more no matter how it beggars their fellows.

We will no doubt receive some unconvincing justification for this deal from the BN.

Greed is good, we may be told. - Malaysia Chronicle

[pywong]

It is amazing how Najib can spout such garbage and keep a straight face.

Saturday, 04 June 2011 13:09

Najib: Subsidies being reduced to improve living standards (http://malaysia-chronicle.com/index.php?option=com_k2&view=item&id=13565:najib-subsidies-being-reduced-to-improve-living-standards&Itemid=2)


Written by Malaysia Chronicle

http://malaysia-chronicle.com/media/k2/items/cache/113fee9e8cbb3ee2526c5fc1c25579d6_XL.jpg

The government's subsidy rationalisation is not a measure to eliminate subsidies but to provide reasonable amounts of subsidy to the eligible and needy target groups and sectors, Datuk Seri Najib Tun Razak said Saturday.

The prime minister said Malaysia provided among the largest amounts of subsidy in the world for daily essential goods such as sugar and rice, and this did not even include the indirect subsidies given to the education and health sectors.

"The welfare of the people is the highest goal in the administration of the country," he said in his speech at the investiture in conjunction with the birthday of Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin, at Istana Negara.

Najib said a decision that appeared popular might not necessarily be the best measure in the longer term and, as such, in managing the national economy it was important to avoid excessive expenditure.

"In the interest of the people and country, a responsible government will find solutions and make choices for the well-being of the people, not only in the short and medium terms but also in the long term," he said.

The prime minister said decisions, for example, to slash and raise taxable income and provide an average subsidy without regard for target groups might elicit rave response at times, but they might invite problems later.

"In fact, when only less than two million of the 12 million workers pay taxes, the two million taxpayers subsidise the majority who do not pay taxes. This poses more challenges, particularly when health and education services are relatively free.

"Malaysia is not a major power which can print fiat money," he said. (Fiat money is money which has no intrinsic value and cannot be redeemed for any commodity, but is made legal tender through government decree.)

Najib said dependence on natural resources such as petroleum and natural gas would not be for forever, adding that the people should be grateful that the country had a well-managed national petroleum company and the government was able to maximise the profits.

"However, these resources are on the decline. Evidently, much more capital has to be expended to seek new resources," he said, adding that one must realise what would happen to the country if the economy was not well-managed.

Najib cited Greece, a developed nation which faced a budget deficit of 10 percent of GDP and debt to GDP ratio of 137 percent as well as a 14 percent unemployment rate.

"Without prudent management, some 110 billion Euros or RM477bil, equivalent to 2 1/2 times Malaysia's cumulative budget, was needed for its (Greece's) bailout," he said.

He also cited Ireland which faced a budget deficit of 32 percent of GDP last year and a debt to GDP ratio of 113 percent as well as a 15 per cent unemployment rate, and said that country needed 85 billion Euros or RM369bil, equivalent to 1 1/2 times Malaysia's cumulative budget, for its bailout.

"Reportedly, both Greece and Ireland may need a second bailout," he said.

Najib said the Malaysian government would always be responsible and not act rashly or even seek popularity, which would be to its detriment.

"Every decision is studied, considered and scrutinised with prudence for the welfare and prosperity of the people," he said.

- Bernama

[pywong]

Respond to Ani’s expose, Najib told (http://www.freemalaysiatoday.com/2011/06/06/respond-to-ani’s-expose-najib-told/)

Teoh El Sen | June 6, 2011

The electricity tariff hike won’t be necessary if the government makes amends on EPU’s mistake, says Guan Eng.

http://www.freemalaysiatoday.com/wp-content/uploads/2011/06/aini-tnb.jpgPENANG: 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.

Lim said in a press statement today that Najib must respond to Ani’s allegation.

He said the scandal cost Malaysians RM131.3 billion between 1997 and 2010.

“Up to end 2010, Petronas has extended about RM131.3 billion in gas subsidy to both the power and non-power sectors,” he said. “If the gas prices remain unchanged… about RM27 billion in 2011 would have to be incurred.

“The prime minister must answer why Malaysians must pay for the mistake.”

He also quoted the Federation of Malaysian Manufacturers, which said the power sector had yet to translate its price advantage in fuel cost into electricity rates that are more competitive with Thailand, Singapore and Indonesia, where the power sectors pay more for gas.

“The cost of electricity in Malaysia following this hike is nearly at par with Thailand,” he said. “If we compare with Thailand’s rate for low, medium and high voltage, Malaysia’s electricity tariff for all these categories is higher.”

DAP publicity chief Tony Pua recently cited Ani’s 2006 interview with The Star, in which the former TNB chief urged the federal government to declassify the power purchase agreements inked between TNB and the IPPs.

Ani said then that TNB was producing electricity at eight sen per kWh but the government asked it to buy from IPPs at up to 23 sen per kWh within a specific number of years and at a certain volume regardless of its requirements.
Ani helmed TNB between 1990 and 1996. He has claimed that he chose to resign rather than sign the lopsided deals

[pywong]

Tuesday, 7 June 2011

The bigger subsidy addicts. (http://sakmongkol.blogspot.com/2011/06/bigger-subsidy-addicts.html)

The favorite 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.

He came up with the solution. We have this problem because TNB has a monopoly. Monopoly is not good. Dependency on one supplier isn't strategic. It can be outright dangerous not to mention can cause untold economic damages if the system breaks down.

Let's deregulate the electricity industry he proclaims. So Ananda, YTL, Genting and others came rushing in. we can supply electricity sir. But we need to have iron clad agreements so that our investments are well covered. We must have a guaranteed purchase from TNB at secure prices.

But sir in order to generate our current, we need cheap fuels. Otherwise we bungkus or consumers will have to pay more. Never mind says sir, I control PETRONAS. I will ask them to sell you natural gas at subsidized rates. And so government pays subsidies up to RM 19 billion a year.

As many people now know, the electricity we consumed passes through 4 stages. Generation, transmission, distribution and retailing.

But boss, we will only generate electricity. We won't go into transmission, distribution and retailing. These are costly. Tarak untung. Kadang kadang untung.

In other words, TNB which has to invest in all 4 stages can offer us cheaper tariffs, but the IPPs awarded license which offer only generation of electricity cannot. How can this be? Apa nama? Macam mana?

Deregulation created an opposite effect in Malaysia. We ended up having to pay higher electricity tariffs because TENAGA was forced to buy electricity from IPPs who charged more for the electricity than if Tenaga produced it itself!

We come now to the stupid remark by the minister who says the government is powerless to reveal details of the PPA. Wasn't it the government that 'negotiated' the deals with the IPPs? So why can't we have access to the details?

Who were the first entrants to the IPP business? Genting Sanyen, YTL Power, Malakoff, SEV, Prai Power,Powertek, GB3, Tanjung Bin Power and Kapar Energy are among the two dozen or so IPPs in Malaysia. All of the above are owned by the Genting Lims, Francis Yeoh, Syed Mokhtar and Ananda Krishnan. These were the usual suspects consisting of the connected businessmen who get most of the big deals.

YTL Power's profit for 2010 was more than RM1.6 billion on revenues of RM13 billion. Malakoff in 2009 had a profit of RM380 million on revenues of RM5.6 billion. Powertek had revenues of RM1.34 billion and a profit of RM450 million.

So Francis Yeoh makes RM1.6 billion and Ananda Krishnan makes RM450 million from his IPP while collecting subsidies from public money. Tiuniamakahai!

It is essentially a transfer of funds from the people's pockets to the IPP's vaults, through TNB, aided and abetted by the government. But the imbecilic minister says we can't reveal. Of course we can't reveal because that would expose the scandalous amount of profits these business luminaries make.

Why should we continue selling fuel at subsidized rates totaling RM 19 billion allowing these people to make huge profits? And the only solution offered and supported by the CEO who's is paid handsomely is to raise tariffs further.

Let us illustrate the absurdity of this business arrangement. Look at the Thai power producers. They do not get subsidies and have to buy fuel at market prices. Fuels cost more in Thailand. Yet, despite the higher cost of fuels, Thai power producers sell electricity at a lower price than Malaysian IPPs sell to TNB. Apa nama punya economics ini?

So who really are the rapacious businessmen who are our own version of medieval German Robber Barons? Our robber barons get to keep their subsidies, and their unnatural, undeserved profits.

Peter Chin, the minister in charge of TNB must be mentally deranged. He claims that he cannot release the IPP contracts because it is between two private entities. Tiuniama punya minister. 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!

The reality is TNB is a very inefficient entity especially its operating cost. In 2005, the company's 40.5% operating costs were spent in purchasing electricity from IPP.

For the financial year 2010, TNBs energy cost grew by 2.4% to RM17,379.0 million from RM16,974.4 million recorded in 2009 mainly due to higher payment to Independent Power Producers (IPP), totaling RM12,528.0 million, an increase of 5.9% compared to the previous (RM11,827.0 million) financial year.

[pywong]

Subsidy flip-flops sign of deeper problems, say economists (http://www.themalaysianinsider.com/malaysia/article/subsidy-flip-flops-sign-of-deeper-problems-say-economists/)

June 07, 2011

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Najib is seen by economists to move back and forth on economic reforms as he balances political pressures at home.

KUALA LUMPUR, June 7 — Economists perceive the Najib administration as prone to backtracking on policies, with political concerns trumping the need for economic reform.


In a scathing commentary published today by the Singapore Straits Times, the government’s dithering over subsidy cuts for energy and basic consumer goods was criticised by regional economists who are stirring a wider debate over the country’s long-term economic prospects.

The Straits Times said the big question being asked now was whether resource-rich Malaysia had fallen out of step with the global environment.

Putrajaya’s subsidy flip-flops, the newspaper said, were putting a spotlight on deeper woes, while the country’s competitiveness continued to be hurt by state intervention.

In recent months, Malaysia has gone back and forth on its intention to cut the large subsidy bill.

The government backed down recently from raising petrol prices before eventually deciding to raise electricity tariffs by seven per cent beginning this month.

Putrajaya announced a 7.1 per cent hike in electricity tariffs in an effort to trim a subsidy bill that would otherwise double to RM21 billion this year, promising that the hike would not affect three-quarters of domestic users.

Power prices will rise by as much as 2.3 sen per kWh in areas taking TNB’s supply, a potential source of public anger just ahead of snap polls expected within a year.

The Straits Times reported today the arguments by economists that decades of state intervention that sought to meld free market practices with an ambitious social agenda to restructure the country’s multi-ethnic society in favour of politically dominant Malays had sapped Malaysia of its competitive edge as a destination for foreign investment.

They also told the Straits Times that the government’s experiment with state command capitalism had created an economy burdened by subsidies, tariff protection and licences that benefit powerful vested interest groups.

“The government is reluctant to take tough measures because of the political impact on the public and the vested interest (groups) it could hurt,” Centennial Group regional strategist Manu Bhaskaran told the Singapore paper.

“But the reality is that there are no easy options.”

The Straits Times pointed out that the Malaysian economy was at a crucial crossroads.

“Malaysia needs bold action because the regional economic environment is changing rapidly, and the breathing space is shrinking,” World Bank economist Philip Schellekens says in a recent interview.

Malaysia’s exports continue to face low-cost competition from regional rivals Vietnam, Indonesia and Thailand, while Najib’s ambition to transform Malaysia into a high-income economy is heavily reliant on foreign investment.

“Foreigners are adopting a wait-and-see attitude because there is little clarity over government policy in dealing with the economy,” a chief executive of a foreign bank here told the Singapore newspaper while asking not to be identified.

Malaysian households are already feeling the stress of rising prices while the Straits Times also cited a recent World Bank report on the country that noted rising household debt as a concern.

Lending to households — for property, credit cards and personal loans — accounted for 55 per cent of the total banking system lending, the report said.

The Singapore daily pointed out that Malaysia’s economic woes are providing the opposition with fodder against Najib’s administration.

The central theme of the opposition campaign is that politically powerful groups which benefit from licences are being spared at the expense of the public, the Straits Times said in its commentary.

“Consider Malaysia’s reluctance to reform its controversial import licensing system for luxury cars, worth hundreds of millions of ringgit annually. All cars not assembled in Malaysia must have so-called Approved Permits, or APs, which are issued for free by the government to a small group of licensees connected closely to the government.

“Typically, the APs are then sold to car distributors for prices ranging from RM10,000 to as much as RM40,000 each. These costs, as well as taxes imposed by the government, are then passed on to Malaysian consumers, who generally pay some of the highest prices for cars in the region,” the newspaper reported.

[pywong]

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IPPs 'overcharging' for power generation
(http://www.malaysiakini.com/news/166750)
Jun 13, 11 2:45pm

If there is no subsidy for natural gas, independent power producers (IPPs) will charge 80 percent more than the current rate, according to think-tank Research for Social Advancement (Refsa).

In a statement today, it said the calculation is an extrapolation of the 25 sen per kilowatt-hour (kWh) being charged, when the gas price was pegged at RM10.70 per mmBtu for IPPs.

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“If the gas price is raised to the market level of RM47.42 per mmBtu, we estimate the IPPs will charge about 74 sen per kWh,” said the DAP-linked group.

When contrasted with Singapore where gas is sold at market prices, the generation cost is just 41 sen per kWh and is sold to consumers at 52 sen per kWh.

Refsa surmised that at the current subsidised rates, the IPPs are producing power inefficiently and are overcharging for it.

“It might be perceived that the IPPs' cost structure is particularly bloated and there are substantial inefficiencies,” reads the statement.

Refsa also called on the Association of Independent Power Producers to elaborate on its power generation costs.

'Bypass secrecy clause'

Refsa also dismissed suggestions that the power purchase agreements (PPA) between IPPs and Tenaga Nasional Bhd (TNB) cannot be publicly disclosed because of the non-disclosure clause.

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The group said that, although TNB is a public-listed company, it is controlled by the government through Finance Ministry-owned Khazanah Nasional Bhd and the Employees Provident Fund, which together control 83 percent of the company.

“The government maintains a golden share, giving it control over key decisions at TNB,” reads the statement.

Refsa said it is in the public interest to make the PPA public to ensure transparency.

It noted that there have been positive outcomes from the disclosure of highway concession contracts, as toll charges have been scrapped for some highways while scheduled rate increases have been suspended.

[pywong]

Price cap cost Petronas RM133b (http://www.themalaysianinsider.com/malaysia/article/price-cap-cost-petronas-rm133b)

June 22, 2011
PUTRAJAYA, June 22 — Petronas could have saved almost RM133 billion between 1997 and March 2011 had the price of gas not been fixed by the government to the power and non-power generation industries.

Gas prices have been capped at RM6.40 per million metric British thermal unit (mmBtU) since 1997, ostensibly to help the country recover from the Asian financial crisis, said Minister of Energy, Green Technology and Water Datuk Seri Peter Chin at a press conference today to explain the gas subsidy to the power generation industry.

The decision to cap the price resulted in Petronas foregoing a certain percentage of its revenue based on the difference in gas prices as reflected on the international market, he said.

Chin added that the price cap also ensured the electricity tariff was kept low.

The gas price was increased by RM3 per mmBtU to RM13.70 per mmBtU on June 1, resulting in an increase of 1.6 sen in electricity tariffs.

Petronas will also end up foregoing another RM2 billion if gas prices are not adjusted every six months by RM3 per mmBtU as proposed by the Performance Management and Delivery Unit (Pemandu).

Chin stressed that no funds were being transferred to Independent Power Producers (IPPs) or Tenaga Nasional Bhd (TNB).

He also said that the fuel cost for electricity generation by both TNB and IPPs was a pass-through component, which would be reflected in the end-tariff to consumers. This, however, would be subject to government approval.

Chin added that if gas to the power generation sector had been allowed to increase in tandem with the market price, the average electricity tariff would have increased by 16 sen per kilowatt hour (kWh) to 47.31 sen/kWh.

The international market price for gas is currently about RM40.70 per mmBtU.

The government’s decision to gradually increase gas prices will allow Petronas to use its revenue for other activities such as exploration.

Chin also denied recent allegations that the gas subsidy was for the benefit of IPPs and TNB.

[pywong]

Diesel subsidy cuts felt by housewives, restaurateurs (http://www.themalaysianinsider.com/malaysia/article/diesel-subsidy-cuts-felt-by-housewives-restaurateurs/)

By Melissa Chi June 23, 2011

KUALA LUMPUR, June 23 — All through the Pudu wet market, one of the biggest in the Klang Valley, one can hear customers complaining that prices of goods are shooting up while sellers try to convince them that they are not profiting as well since the start of 2011.

This conversation is repeated across the country from Perlis to Sabah, reflecting the 2.9 per cent hike in the Consumer Price Index (CPI) for the first four months of 2011 but more since June when Putrajaya cut diesel subsidies for hauliers and trawlers, adding to the price of basic food items and other goods.

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People buying fish at the Pudu wet market. Customers are complaining that prices of almost everything have gone up. — Picture by Choo Choy May

Restaurant owner Kak Mai told The Malaysian Insider that when prices of chicken and fish go up, she can’t raise the prices at her restaurant.

“I’ll just have to make less, what to do,” the 53-year-old said, pointing out that siakap fish (barramundi) has gone up from RM20 to RM24 per kg in the past few days, although she expects prices to come back down.

Fifty-six-year-old Mrs Cheong , who operates at a school canteen, was buying fish in bulk when approached by The Malaysian Insider.

“I sell at a school canteen, after signing the contract, the price is fixed and I cannot hike the price at all,” she said, adding that her profit went down from 20 per cent to 10 per cent in the past few weeks.

Until May 31, 2011, C2 trawler operators received a subsidy of 28,000l to 30,000l of diesel per month at RM1.25 per litre. Diesel super subsidies were removed for the C2 fishing trawlers and nine other logistic-related groups this month.

Those operating trawlers in the C2 category or 30 nautical miles offshore have been on strike since June 11 over the June 1 diesel price hike from RM1.25 to RM1.80 per litre.

Prime Minister Datuk Seri Najib Razak launched the Kedai Rakyat 1 Malaysia (KR1M) no-frills grocery shops yesterday in a move to mitigate rising prices of dry goods in the Klang Valley.

But the prices in the wet markets are subject to volatility.

Mohd Rosli Osman, 43, who was shopping for his family, pointed out that kerapu (grouper) went from RM9 to RM12 per kg and ikan bawal (pomfret) from RM8 to RM15.

Chan Soon Hoong, 48, who has been selling fish for 30 years, said the government should continue to provide the diesel subsidy.

“It costs twice as much now for almost anything,” he said.

Yuslizal, 42, another fishmonger at the market, agreed.

“The government should continue to subsidise. If the prices are too high, consumers don’t want to buy. Many of my customers complain about the price hike and they don’t know the reason why,” he said, adding that with less sales his profit margin has grown smaller, sometimes he just breaks even.

Rudi, 28, who has been operating at the market for three years, sells only freshwater fish such as pacu, rohu and tilapia.

He said the prices of his fish have also gone up as without the diesel subsidy transportation costs have gone up as well.

“Luckily I just sell freshwater fish because sea fish are way more expensive,” he said.

Mohd Erfan, 29, who sells chicken next to Rudi’s stall, said the price of chicken went up 30 sen continuously over the past three days.

As he was chopping up pieces of chicken, he explained that regular customers who run restaurants have cut down their orders from 10 birds to six per order.

He sells about 200kg to 250kg of chicken per day.

However, when The Malaysian Insider spoke to vegetable sellers, they said that there was no hike in their prices. Most of their vegetables come from Cameron Highlands.

The Najib administration has to take a razor to its subsidy bill despite surging inflation which hit a two-year high of 3.2 per cent in April as it attempts to trim the budget deficit down to 5.4 per cent after it hit a two-decade high of 7 per cent in 2009.

For the first four months of the year when the CPI averaged 2.9 per cent up, the three indices that rose highest was Transport (+ 4.6 per cent); Food and Non-Alcoholic Beverages (+ 4.5 per cent) and Housing, Water, Electricity, Gas and Other Fuels (+ 1.5 per cent).

Putrajaya said the June 1 subsidy cuts would save RM659.30 million, and had to be done due to the global increase in fuel prices since the start of 2011. Coincidentally, it brought down the market float price of RON97 premium petrol by 10 sen to RM2.80 a litre this month when global prices eased.

[pywong]

Wednesday, 01 June 2011 08:42

Who are the Robber Barons of Malaysia Featured (http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=13343:robber-barons-ipps-tnb-bn-or-all-three?&Itemid=2)

Written by Ismail Dahlan, Malaysia Chronicle
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Rate this item1 2 3 4 5 (43 votes)

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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.

And the reason you are paying more for electricity has nothing to do with any global event, as the BN would like you to believe. The reason you are going to have less money in your pocket is the incompetence, inefficiency and corruption of the Barisan Nasional government.

There are two types of electricity markets in the world, regulated and deregulated ones. Regulated ones would have a single, usually government-owned entity which would be responsible for the four key areas in the electricity business; Generation, Transmission and Distribution and Retail. Naturally monopolies were inefficient. The idea behind deregulation is that having private companies focus on the Generation and Retail areas would increase efficiency and reduce the cost to the consumer.

Read only if you need to know more :

• Generation is the process of producing electricity from fuel like natural gas or coal. In Malaysia, natural gas is widely used and IPPs buy it at a subsidized rate from Petronas; subsidies amounting to RM19 billion in total.

• Transmission is the process of transmitting electricity from the generator to the sub-station near your house via the National Electricity Grid.

• Distribution is the process of transferring the electricity from the substation to your house.

• Retail is where they bill you for the electricity for your house. In some countries this is deregulated where you can buy electricity from different, competing, companies though it comes from the same source. In Malaysia, TNB is still responsible for it.

Tycoons behind the IPPs

Electricity deregulation really started in UK in the early 1990’s. It spread worldwide and Malaysia too deregulated, but only its Generation business. This was done by giving licenses to Independent Power Producers (IPPs). Which should have resulted in reduced electricity cost to the consumer.

But that’s not what happened. In Malaysia’s topsy turvy wonderland, deregulation increased the cost to the consumer! This was because Tenaga was forced to buy electricity from IPPs who charged more for the electricity than if Tenaga produced it itself!

It was the BN government that ‘negotiated’ such deals with the IPPs. Either they are criminally incompetent, awfully stupid or they are corrupt. You may take your pick. It may be a combination of all three.

So who are these IPPs? Genting Sanyen, YTL Power, Malakoff, SEV, Prai Power,Powertek, GB3, Tanjung Bin Power and Kapar Energy are among the two dozen or so IPPs in Malaysia. All of the above are owned by the Genting Lims, Francis Yeoh, Syed Mokhtar and Ananda Krishnan. The usual suspects, of course. The connected businessmen who get most of the big deals. Who will know how to take care of their political benefactors.

YTL Power’s profit for 2010 was more than RM1.6 billion on revenues of RM13 billion. Malakoff in 2009 had a profit of RM380 million on revenues of RM5.6 billion. Powertek had revenues of RM1.34 billion and a profit of RM450 million.

So Francis Yeoh makes RM1.6 billion and Ananda Krishnan makes RM450 million from his IPP while collecting subsidies from public money. It is essentially a transfer of funds from the people’s pockets to the IPP’s vaults, through TNB, aided and abetted by the BN.

When this economic joke of a system is about to come crashing under its own silly weight, the BN solves the problem by raising the electricity tariffs, making Malaysians pay for it.

Now here is a strange thing, Thai power producers do not get subsidies. They have to buy fuel at market prices. We know that petrol costs more in Thailand, which is why they are always trying to fill up their tanks in Malaysia. So does gas cost more in Thailand. Despite this higher cost of fuel, Thai power producers sell electricity at a lower price than Malaysian IPPs sell to TNB. Ask the BN, and they will tell you that there is clearly something wrong; with the Thais! Why aren’t they trying to grab as much public money as possible, as fast as possible like us; the BN no doubt wonders.

TNB is a GLC, declassify the contracts

Meanwhile, Malaysian’s own version of medieval German Robber Barons (who were known for extorting huge tolls from passing ships and travellers), get to keep their subsidies, and, their unnatural, undeserved profits. They are despicable fellows who prey on the helpless. Big business, controlled in Malaysia by a small number, are now become adversaries of the people. They extort unbearable tolls and they bankroll and prop up a regime that is beggaring the nation. No longer can they fake innocence and hide in the shadows.

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!

Another 5 years of the Barisan’s rule, and Malaysia will become an economic basket case. Where ruthless connected businessman live off a suffering citizenry while cosying up to the ruling elite. Where greed and self-serving politicians and policies are the order of the day.

If there is to be change, it had better be now. - Malaysia Chronicle