TNB has been bleeding red ink of late as a crippling gas shortage takes its toll. It is now time to review those lop-sided concession agreements with the independent power producers, especially the first-generation IPPs.
Instead of gas, TNB now has to use much more expensive distillates, which cost five times more, as substitutes. It spent RM2.1bn on distillates in January-August 2011.
Check out TNB’s third quarter results for the 2011 financial year:
(Click to enlarge) Loss before tax for the third quarter was RM0.6bn compared to a profit of RM1.3bn for the same quarter last year.
Its fourth quarter performance could be even more disastrous.
It reportedly may now have to seek financing to cover even its operating expenditure.
Isn’t it time the power purchase agreements (PPAs) with the IPPs are renegotiated? In fact, a review is long overdue. Otherwise TNB’s major shareholders – representing the public via Khazanah (36 per cent), EPF (14 per cent) and Skim Amanah Saham Bumiputera (10 per cent) – would be splattered with red ink (poor returns).
Another classic case of privatisation of profits, socialisation of costs/losses.
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Life was much better during LLN (Lembaga Letrick Negara) days.
After privatisation, rakyat suffers!
That’s the legacy of Tun M.
Its the same issue why we can have a cooking oil shortage when Malaysia is one of the world’s largest palm oil producers. Malaysia is the worlds 3rd largest LNG exporter, Petronas focuses on the lucrative Japan market. When the domestic market is distorted by artificial price controls – in this case Petronas is “forced” to sell subsidised gas to the IPPs – the supplier will allocate the minimum that it can get away with, regardless of how much total supply it actually has in hand. In the end, regardless of government Public-Relations spin, the Rakyat are effectively subsidising the… Read more »
That is why the government is trying to bring in GST.
GST taxes everyone whether you are working folks or not. The moment one spends money, he or she gets taxed !
so if you are retirees, you need to readjust your budget accordingly as you need to cater for that % in most things (except essentials according to BN ?) you purchase.
for those who never pays taxes, you will be indirectly asked to contribute to gomen coffer whenever you spend !
Petronas has a monopoly on gas. So, how is it that priority is not given to ensure uninterrupted supply to Tenaga? Is Petronas sabotaging Tenaga? Ever since Omar Ong was appointed to the Board of Petronas, some strange things have been happening – like “marginal” oil field exploration contracts being given to Sapura and Kencana which have now merged. Ther are now rumours that Sapura/Kencana will be licences as a kind of “Petronas 2”. Anyway, Khalib who was knighted CEO of The Year after Tenaga’s humongous lossses (in 2009?) has shown he can’t organize… Make no mistake. All of Tenaga’s… Read more »
I remembered quite some time ago during TDM’s watch, the Bintulu Gas was sold to the Japanese. That is where the natural/petroleum gas has gone to. Tenaga said the shortage is due to maintenance works by Petronas. What a load of …. Tenaga’s need for gas is quite predictable, so contingency plans should have been in place. Is this the first year that Tenaga is into power generation? The answer is simple: We are running very very low of our resources. Who is to blame? Ask yourselves whose watch was Malaysia under for the last 22 years. The answer is… Read more »
To ask UMNO/BN to review the PPA is hopeless call. For a review of the PPA to work, it will need someone with legal expertise who is hell bent on going after the IPP with every trick in the book. No way UMNO/BN will allow those PPA to be public as it will subject them to too much criticism.
Those who think the IPP got an unfair shake, their choice really simply its to boot out BN.. There is no other thing..
GOD has a subtle way of dealing with bad people. TNB now have no choice, either it renegotiate with the IPPs or die! There is no way for TNB to pass the burden to consumers, this will create political liability for Najib administration. BN can’t afford to let the tariff go up again. The resulted inflation will (upset) voters in the coming election. Unless Najib foolhardy believe that BN is invincible, then we see another round of tariff hike.
I vividly remember the Chief Executive of TNB then Dr Ani Arope telling the whole world that he did not support the terms esp the price and compulsory purschese of power from IPPs in fact the whole idea of Ipps to … Mahathir then. But … Mahathir rode rough shod over this excellent advice of Ani arops whomis most intelligent and clever compared to that … fellow. Can we put the … fellow on the mat now for he has led the nation into such great diificulties now. Ani atroe please come out agian and confirm this so that (he)… Read more »
Ani Arope has been writing more about this on his Facebook.
Najib doing a lot of rebranding to improve his image. Last week he decided to abolish ISA after a dip in approval rating.
So next time his image gets hit by poor rating, more and more will be reviewed to please the rakyat.
May be IPP will be the next one to be reviewed in favor of consumers ?
Najib plans to raise 1.3 million civil servants bonus/salary in his budget 2012 to counter inflation.
This is to ensure no cries of barang naik among his safe deposits in coming GE.