The contract for the 1,000MW Tanjung Bin coal power plant was awarded through a limited tender involving only two companies, said Energy, Green Technology and Water Minister Peter Chin.

“This project was conducted through a closed tender at a brownfield land because it must be completed in a short period of time and begin operation in 2016.

azlan “In view that there are only three coal power plants operating in Peninsular Malaysia... the construction of the power plant was awarded through limited tender,” Chin said in a parliamentary written reply to Petaling Jaya Utara MP Tony Pua.

The project was eventually awarded to Tanjung Bin Power, a subsidiary of Syed Mokhtar al-Bukhary’s Malakoff Bhd. The other bidder was Jimah Energy Ventures Sdn Bhd.

To another question from Pua, Chin said the power purchase agreement (PPA), which determines the tariff for electricity sold to Tenaga Nasional Bhd, was still being discussed.

Chin said Tanjung Bin Power and the Energy Commission were expected to come to a conclusion by year’s end.

In a statement today, Pua said the tender process was not transparent and done in an anti-competitive nature that translated into higher tariff costs for the public.

“I fail to understand how a project only expected to commence operations in 2016, which is five years from now, is so urgent that only two companies were called in a limited tendered exercise.

“Having more than a decade of experience with IPPs, as well there being as more than half-a-dozen qualified IPPs in the country, there is little excuse for the ministry to avoid an open and competitive tender,” Pua said.

Competition made Thai electricity cheaper

He also criticised the government for failing to finalise the PPA and the concession period before awarding the project to Tanjung Bin Power.

This gave rise to the possibility that Tanjung Bin Power could now charge Tenaga Nasional uncompetitive rates, which would eventually be borne by consumers.

Despite heavy natural gas subsidies given in Malaysia, he said, consumers and businesses paid more for electricity than their counterparts in Thailand, which provided far less in terms of gas subsidies.

“Natural gas is supplied to Malaysian IPPs at RM13.70 mmBtu while it is 68.6 percent higher in Thailand, at RM23.10 mmBtu.

“Despite that, a consumer using 500kW of electricity a month in Thailand pays only RM129.50, or 21 percent cheaper than Malaysians, who pay RM157.20,” he said.

Pua said the lower tariff in Thailand was due to its competitive IPP market, where the government awarded concessions after a rigorous prequalification exercise based strictly on price.

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