The federal government has come under fire for failing to implement the National Energy Diversification Programme (NEDP) from Penang Chief Minister Lim Guan Eng.

The NEDP was meant to reduce Petronas' gas supply and subsidies to Independent Power Producers (IPPs) and divert them to households and industries.

anwar ibrahim sodomy allegation saiful bukhari azlan first day in court 070808 lim guan eng Lim wants the present 65 percent supply power sector to be cut down to 45 percent, which would free up supply and subsidies to industries, therefore increasing our attraction to foreign investors and the country's alternative energy credentials.

"If implemented effectively and decisively, the programme would have benefited all, especially the industrial sector, increase investment potentials and enhance the country's capabilities to generate energy from various ways and means.

"In the long run, we would be more cost effective and competitive," he said, criticising Putrajaya for failing to implement the NEDP.

Penang recently lost RM6 billion potential investments from German and American companies due to a lack of gas supply - despite Petronas constructing the RM11.5 Peninsular Gas Utility System (PGUS) pipeline.

The pipeline runs from a Petronas plant in Terengganu to Port Klang, cutting through Perlis, Kedah, Penang, Perak and Selangor.

None of the pipeline-states receive gas supply from the Petronas pipeline for their households and industries.

"There is pipeline with no gas supply, thus we lost out huge investments.

"Other states too could be suffering from investment losses due to no gas supply.

"IPPs are taking the biggest share of the gas supply at the expense of larger interests and benefits of the country," a fuming Lim told a press conference at this Komtar office in George Town today.

The country's 23 IPPs take up a bigger share of the 65 percent supply - than national energy supplier Tenaga Nasional Bhd (TNB) - and receive 46 per cent of the RM77.9 billion gas subsidies given by Petronas to the power sector.

Huge perks

Lim criticised it as "unjustifiable and against the people's interests' and questioned the rational behind the huge supply and subsidies to IPPs.

"Giving more supply and subsidies to TNB is justifiable to allow consumers to enjoy lower electricity tariffs.

"But not IPPs because it only allows the companies to make bigger profits and their directors to enjoy huge perks at the expense of the country's 27 million population," he said.

He met Petronas president and chief executive Mohamad Hassan Merican at the Petronas Twin Towers on Tuesday to discuss on gas supply to Penang industries.

Equipped with information received from Hassan, Lim now no longer blamed the national oil corporation for discrepancies in gas supply and subsidy distribution, but rather lashed out at the federal government's lopsided concessions heavily favouring IPPs.

The Chief Minister blamed the federal government's failure to implement NEDP as the main cause of such discrepancies, and called on Putrajaya "to do justice and safeguard the people's interests."

"What's the point of oversupplying IPPs while facing severe shortage domestically?" he asked.

The general view is that Malaysia being a top exporter should not face a gas shortage domestically.