Electricity rates have been increased so this is a good time to study why we are in this situation.
TNB used to be an efficient statutory board until it was privatised and had to dance with independent power producers (IPP) that now burden it, like a mill-stone around its neck. The way IPPs were introduced could be construed as a major conspiracy to defraud Malaysians as they were given a golden hand-shake when they started....maybe a golden hand-cuff is more appropriate as the government claims the IPP agreements are protected under the OSA.
Could it be that the major power shortages that saw the birth of IPPs were planned on purpose by the Economic Planning Unit (EPU)? According to an interview given by the former TNB chairman who "was put out to pasture", TNB had to agree to all EPU demands.
Since our gas is about 35 percent cheaper (RM13.70 to RM18.23) than Thailand's, the only reasons why TNB has to charge more are:
- It cannot generate the units to optimum capacity and
This is a sure way to generate expensive units when the nation has 50 percent plus reserve; with TNB having to restrict production when it has the highest overheads.
TNB has been bleeding while the IPPs are laughing all the way to the banks! Just imagine TNB can produce at 8 sen per kWhr but has to purchase at 14 sen per kWhr - that is a cost increase of 75 percent.
Also according to an earlier article, we have a reserve capacity of approximately 50 percent with TNB generating only 40 percent as it has to buy everything the IPPs supplies.
It would be interesting to discover what are the production costs of the individual IPPs and whether any have been able to become more efficient.
The EPU imposing the 14 sen rate when an IPP could offer 12 sen could be considered a serious anti-competition measure and deserves a proper investigation.
The entire IPP power-sharing should be renegotiated-with TNB declaring how much supply it will buy on the open market and IPPs making their bids.
TNB can then purchase units at its own cost plus maybe a margin of 10 percent of 50 percent of IPP capacity. If IPPs want to offer more they can offer at TNB cost plus a percent margin. This creates more competition among IPPs.
Since the government claims it cannot disclose the IPP agreements as it is not a party, for me the only resort is to vote out the BN and lift the veil of the OSA secrecy that it itself imposed on the agreements.
We should also have a public inquiry on the sacking of the TNB chairman at the time IPPs were sponsored by the government. The inquiry should also check out all EPU officials who took up top positions in privatised entities for improper conduct.
