Emily Tan
The Sun
The DAP yesterday questioned the need for Tenaga Nasional Bhd and the
Independent Power Producers (IPPs) to seek a tariff hike when they have
been enjoying profits of up to RM25 billion in gas subsidies from
Petronas
"Since May 1997, Petronas has supplied processed gas to Tenaga and the
IPPs at a regulated price of RM6.40 per mmbtu (British thermal unit) as
compared to the current market price of over RM30,"said DAP
secretary-general Lim Guan Eng.
Of this, Lim said RM14 billion of the profits generated from the subsidies
went to the IPPs, while Tenaga received RM11 billion.
"As the IPPs are private companies enjoying special rates for generating
electrical power that Tenaga is forced to purchase, there is no reason
for the IPPs to enjoy such huge subsidies to profit at Tenaga and the
Malaysian consumerÕs expense,"he said in a statement released Monday.
Lim urged the government to review the compulsory power purchase
agreements contracted above market rates imposed on Tenaga, rather than
asking consumers to pay more.
He said the DAP also opposes the tariff increase on the basis of TenagaÕs
large profit increase.
"Tenaga recorded a 57% net profit increase to RM1.28 billion in the year
to August, as compared to RM813.7 million the previous year.
"Furthermore, the company declared a 12 sen dividend and a one-for-four
bonus share issue, giving them even less justification for raising the
rates,"Lim added.
He also questioned TenagaÕs management, stating that the companyÕs rate of
return (5.2%) is the lowest amongst utility companies in South-East Asia,
despite its high profit increase.
Meanwhile, Energy, Water and Communications Minister Datuk Seri Dr Lim
Keng Yaik said the government will find a way to assist Tenaga Nasional
Bhd to ease its rising burden in higher operations costs. "Tenaga is
under tremendous pressure to make ends meet as a result of higher cost of
operations.
"Yet, we are not ready to burden the Rakyat on any increase of tariff. We
are stuck in a dilemma but we will find a way out,"he told reporters in
Putrajaya yesterday.
Asked whether there would be any increase in tariffs, Dr Lim said: "There
is no increase for the time being."
Asked to elaborate on "for the time being", he said: "I could extend to
next year or I could extend to next 10 years."
Prime Minister Datuk Seri Abdullah Ahmad Badawi has said there would be no
electricity tariff increase this year, but most observers expect an
increase or at least a tariff rebalancing next year.
Dr Lim had previously said that the government wanted Tenaga to be more
cost efficient in its operations before it would agree to any request for
a tariff increase.
At yesterday's event, he said the government was always looking at other
alternative sources of energy.
"You can put in other sources of electricity but they can only come online
in two to three years. We have more than enough electricity. We have 45%
in reserves at the moment,"he said.
Dr Lim said any further investment in electricity generation would be a
burden to Tenaga.
"If you increase capacity, Tenaga would have to keep electricity and not
sell it to make revenue,"he added.
Posted by Raja Petra Kamarudin to MT-news at 11/08/2005
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