Ananda Krishnan’s sale of his power generation assets at this time raises a number of questions and concerns – more so as the assets are being sold to 1MDB, whose debt is guaranteed by the federal government.
1MDB is a “strategic development company” owned by the Malaysian government. The firm started life as the Terengganu Investment Authority (TIA), which was set up to manage Terengganu’s RM1bn annual revenue from oil royalties under what would be the country’s second sovereign wealth fund. It has issued bonds (on the strength of its oil royalty income i.e. our oil money) and these have been guaranteed by the federal government (i.e. the public bears the burden of the guarantee).
The RM8.5bn deal between Ananda Krishnan’s Tanjung Energy Holdings Sdn Bhd and 1MDB should be viewed against the following backdrop:
Tenaga has been incurring huge losses in recent quarters. Apart from the shortage of natural gas, TNB is groaning from the heavy burden of capacity payments to IPPs. In FY2010, the capacity payments amounted to RM15.9bn; in FY2011, these payments soared to RM19.2bn. IPPs, especially the first generation, have profited from such favourable terms – at TNB’s expense (and by extension, the Malaysian public’s expense – as TNB is a government-linked firm).
The Energy Commission has reportedly announced that these first generation IPPs would be required to take a cut in capacity payments (based on installed capacity) before their contracts can be extended. The Edge (5 March 2012) reported that when the first round of power purchase agreements (PPAs) start expiring in 2016, IPPs may have to mothball their plants if the PPA renegotiations remain deadlocked (which means they will not be allowed to sell their power to TNB).
Because of the shortage of natural gas (for whatever reason), Petronas is moving towards importing more natural gas. At present, gas subsidies are gradually being removed. Soon, the cost of gas that Tenaga buys will move up closer to market price, and the IPPs may be asked to absorb a share of the higher cost of fuel.
Also, Pakatan has indicated that if it comes to power in Putrajaya, it will renegotiate the lop-sided PPAs, which were entered into under the Mahathir administration – for which Tenaga has suffered immensely. The IPPs are bound to be concerned about what could happen if Pakatan comes to power. The gravy train could come to a screeching halt.
This article in the Malaysian Insider raises concerns about the deal itself.
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You guys should know why ?????????????? AK wanted to sell his stake in the power station. Who is behind this AK, the man behind is deep worry that when the bn collapse, he got nothing. But whatever it is the greed will boil him sooner or not latter. So easy just to announce his intention to sell & absorb by the government, why others did not do it ??????? Maybe you guest it. BACKING from the tai lo up there or else soul in heaven / hell —————- money in the bank.What is he doing with the billions ? It’s… Read more »
sure way to make billionaires, BN-way.
first you give your cronies sweetheart deals.
then when the sweetheart deals are near the end of the contract, use the govt coffers to pay the cronies billions for the shares.
Bn-you sure smart ah.
Like GK said, It is AK’s private entity, he can do what he likes. Why he sell, it is time cash out, to many risks ahead. Why IMDB buy, b’coz he is inpower now, it is his time to milk the cow. Intertwined business with politic, you get political business, a new business, only in M’sia. Example, A wife of ex CJ’s wins Kidex contract by merit, a son of ex PM wins O&G contract by merit too, a daughter of CM made billions out of properties, also by merit and the husbund of a minister is said try breeding… Read more »
All this wheeling and dealing by the top guns makes our head spins, doesn’t it?
Have you ever taste frog legs fried in chillies and ‘Or Tau Yew’?
Good, smooth and finger-licking good!
But when we hear about wheeling and dealing with Partying & Hopping ‘Hee’ Frogs, that definitely makes our head spins and shaking!
Have the price tags gone up for a Hopping ‘Hee’ Frog? A sign of desperation?
Strange things do happen before election time.
$$$ are needed for war chest.
it is not surprising for BN cronies to do their contribution.
Why so busybody ??? It is AK decision. AK could sell to anil for RM1. So what ??? It is AK own business.
And is someone getting 30% commission from the sale of electricity to Tenaga? While the IPP’s and cronies laughed their way to the bank, Tenaga and Malaysians suffered from the continuos hike in electricity tariff?
Only stupid dudes behave and comment the way they did, do and are doing.
Tak tau malu!
Was wondering what happened to you. So, did you like my thoughtful response? I like it when you have nothing to say. Your frustration just shines through.
Oh, don’t KACAU me today !!! I’m so emotional today ~
Today is a sad day for Penangites. The 4th anniversary of Try 5 years Die 5 years.
Just proved my point.:-p
You have excellent ‘unforgettable’ memory of the ‘Good Change for Penang.’
Let’s hope you don’t continue to bury your head in the shifting sands of change awfully practiced by your ‘state-transmigrated’ mentor Boh Lan Hoot.
Go get a cuppa of real good & hot Kopi-O kau kau @ Gurney Drive MPPP food court. And it really taste good in this drizzly weather. The mamak is always smiling and good for your mood too!
Hey, how come no one is celebrating the 308 anniversary? Know anything, Anil?
Actually, if not for GK, I don’t think anyone would have remembered the anniversary!
Maybe people are thinking ahead to the coming GE..
Yeah, give a cheer to GK!
He will feel good in this gloomy drizzling weather!
We tried BN with KTK for 18 years and it was s…, pure s… 999.9 %! With Pakatan for 4 years, Penangnites can hold their heads up high !!! So, let’s get ABU into play
1MDB truly for the rakyat ?
1MDB profits for the rakyat ?
Does Terengganu Investment Authority (TIA) accoutable to the collapse of the State Stadium ?
If not, which ?
” Pua noted that 1MDB finances its business operations entirely through debt guaranteed by the federal government.”
Debt guaranteed by the federal government are not part of our national debts and if included will mean that our national debts are higher than the official figures.
This is what bean counters called ” off balance sheet financing “.
they are piling up the debts for Anwar to settle…But no matter, where do they think they can go… Mars?…as long as they are on this earth… we will hunt them down and Rafizi will strip them clean..
Where’s that crusader for the poor, Gherkin K? The beauty of a two party system is misdirection will no longer work.
Someone should check (on) Mahathir(‘s role) …
if this happen in china… (the culprit) and his kuchings will be lined up against the wall… and from behind the wall the loud sound of hooray from the citizen will reveberate drowning out the sound of the M16 guns…being discharged…