1Malaysia Development Bhd (1MDB) has received yet another major power plant project without an open tender in what is seen as a bid to shore up the debt-ridden corporation, says DAP’s Petaling Jaya Utara MP Tony Pua.

The Energy, Green Technology and Water Ministry confirmed in a written reply to Parliament last Thursday that it awarded a 2,000MW gas-turbine power plant in Malacca to 1MDB, Pua said.

"The rapid succession of multi-billion ringgit power producing contracts awarded to 1MDB proves that the federal government is pulling out all stops to ensure the viability of the initial public offering (IPO) of 1MDB's energy arm.

"The underlying reason is obvious - without a successful IPO, 1MDB is already an insolvent company awaiting a painful bankruptcy, which will create an earthquake in the Malaysian financial market," Pua ( left ) told a press conference in the Parliament lobby this morning.

"Therefore, by hook or by crook, the Najib administration has to ensure a viable and successful IPO temporarily to prevent 1MDB's collapse, even if it means a highly negative impact for both the industry and consumers," he added.
 
Pua pointed out that 1MDB had already signed a power purchase pact with Tenaga Nasional Berhad (TNB) in April to design, construct, own, operate and maintain a 50MW solar photovoltaic energy facility in Kedah.
 
This is on top of a controversial RM11 billion award of a 2,000MW coal-fired power plant in February in an open tender, even though offering at a higher price.
 
"In fact, based on the reply given by the minister, the latest award to 1MDB was granted even before the key terms such as the electricity tariff were set or agreed upon.
 
"This is worse than directly negotiated contracts because there's no negotiations at all," he said.
 
Pua said to date, 1MDB's energy arm has already postponed its IPO twice due to unattractive valuation and is now expected to be in early 2015.
 
"The immediate impact of such bias towards 1MDB would be the crowding out of the private sector and the deterence against any foreign direct investment in the country.
 
"Ultimately, the losers will be ordinary Malaysians, who will have to foot higher electricity tariffs as a result of higher tariffs awarded to 1MDB, as well as a drastically reduced competitive environment in the power producer market," he said.