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Chua: Tell the truth on IPPs

KOTA KINABALU, July 26, 2011: Member of Parliament for Tawau, Datuk Chua Soon Bui, urged the Ministry of Energy, Green Technology and Water to give the whole picture on the energy industry and Independent Power Producers (IPP) in Malaysia as the increased on the Electricity (Power) tariffs are unfair and unjust to Malaysians especially to those in Sabah.

The facts and figures quoted are just part of the selected truth and she questioned on why the TNB/SESB are holding back the rest of the whole truth.

Chua said Malaysians are no longer "frogs living inside wells" and deserve to know the truth on the energy commissions of the industries and Independent Power Producers in the past and the future.

She challenged the Ministry to reveal IPPs contracts to the people in Malaysia so that people would know the whole truth on the increased of the power tariffs.
"It's pointless for the government's transformation programmes when the related Ministry always chooses to tell half truths and expect the people to accept the 'make-believe'.

Chua, who is also the Vice President of SAPP, urged the Ministry to explain the following :-

1) Why the Ministry is taking so long to reveal the contracts of the Power Producers' Agreements (PPAs) with all the IPPs especially those in Kota Kinabalu, Sandakan and Tawau? Is it true that there are 2 types of payments in the PPAs with the IPPs, with one as the Capacity payment and one as the Energy payment ? Reliable sources have indicated that the Capacity payment of 21d years is based on the IPP construction cost, i.e. the higher the construction costs, the higher is the capacity payment. The Capacity payment is to be paid by TNB/SESB in Sabah, (or TNB in peninsular Malaysia) to the IPPs regardless of whether the plant is producing and IPPs are paid based on Equivalent Availability Factor (EAF), on its monthly testing. It was revealed that the initial financial Model of IPPs were done above board at the EPU with TNB and SESB having no chance or choice to negotiate the tariffs with the IPPs. As for the Capacity payment, as long as IPPs is on standby, TNB/SESB (Sabah) or TNB (peninsular Malaysia) are obligated for full payments on the capacities of the plants every month based on the tested EAF, and not based on the consumed amount. This explained on why every IPPs in whole Malaysia, including those in Sabah are making guarantee huge profits of multi-billion Ringgits every year. It is very unfortunate that TNB/SESB have to pass it on to the consumers, the people for tariffs increased otherwise they will go bankrupt.

She equated that the Ministry allowed it to happen below their noses, by robbing the poor people and enriching the Rich.

2) The Minister Dato’ Peter Chin’s answer in the parliament that the government is not subsidizing the IPPs is very much unacceptable. The above PPAs has already ensured huge profits enjoyed by the IPPs. Furthermore, it's pointless to argue that Petronas can make more profits by its sale in the International market and its revenue foregone or lost by the Petronas for the benefits to the people, then why isn't Petronas morally obligated to the Malaysians in Sabah when Sabah is an oil producing State? In reality, isn't it true that any increased of Gas or fuel oil prices is passed on directly to TNB/SESB rather than the IPPs with the people suffered with the increased of tariffs. This has clearly explained on how the IPPs continue to pocket the huge billions of Ringgit profits at the expense of the people.

3) Now that the Peninsular Malaysia has an excess of 40% power supply. It is eminent that the TNB has to pass on the 40% excess production cost to the people to bear the burden of the tariffs increased. Malaysians in Sabah suffered worse fate in that people who are deprived of continuous power supply also have to pay for the capacities of the IPPs which are incapable of their maximum productions.

The outcry by the people of Sabah seemed to fallen on deaf ears and the Ministry, TNB/SESB will continue to mislead the people with the untold truth.
She urged the Ministry to re-evaluate its role in the power supply in Sabah as the people have suffered enough especially being the poorest state in Malaysia, amidst with continuous power disruptions.

It's the government's obligation and moral responsibility to provide basic facilities such as power supply to the people and not to be just answerable to the IPPs with the people suffering the burden of the Tariffs increased. She urged the TNB/SESB to abolish the increased of tariffs and set up a task force to re-evaluate the rates for a long term solutions.

The truth of the Unjust, Unfair tariffs increase suffered by the people in Sabah will be eventually reveal in the next general election of GE13.

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