Thursday, June 2, 2011

malaysiakini and latest on TNB tariff hikes.....

Electricity rates have been increased so this is a good time to study why we are in this situation.
For me, the government has become too big to benefit anyone except its employees. At the last count it seems we have maybe 40% surplus civil servants as we have already spent billions in ICT without the corresponding drop in manpower. Everyone knows the BN has been giving jobs to unemployable graduates who get a one year's paid internship for on the job training and also acquiring soft skills.
That is why the federal budget cannot be managed as salaries and other benefits eat up a major portion of revenue.
But this article is about the TNB rate hikes....
TNB used to be an efficient statutory board until it became public and had to dance with IPPs that now burden it, like a mill-stone around its neck. The way IPPs were introduced could be construed as a major conspiracy to defraud Malaysians as they were given a golden hand-shake when they started....maybe a golden hand-cuff is more appopriate as the government claims the IPP agreements are protected under the OSA.
Maybe the major power shortages that saw the birth of IPPs was planned on purpose by the EPU?

According to an interview given by the Chairman of TNB who "was put out to pasture", TNB had to agree to all EPU demands.

Since our gas is about 35% cheaper (RM13.70 to RM18.23) than Thailand's, the only reasons why TNB has to charge more are:

1.It cannot generate the units to optimum capacity and
2.It must pay the IPPs a price way above their operating costs.
This is a sure way to generate expensive units when the nation has 50% plus reserve; with TNB having to restrict production when it has the highest overheads.

TNB has been bleeding while the IPPs are laughing all the way to the banks!
Just imagine TNB can produce at 8sen per kWhr but has to purchase at 14sen per kWhr -that is a cost increase of 75%.
Also according to an earlier article, we have a reserve capacity of ~50% with TNB generating only 40% as it has to buy everything the IPPs supplies.
It would be interesting to discover what are the production costs of the individual IPPs and whether any have been able to become more efficient.
The EPU imposing the 14sen rate when an IPP could offer 12sen could be considered a serious anti-competition measure and deserves a proper investigation.

The entire IPP power-sharing should be renegotiated-with TNB declaring how much supply it will buy on the open market and IPPs making their bids. TNB can then purchase units at its own cost plus maybe a margin of 10% of 50% of IPP capacity. If IPPs want to offer more they can offer at TNB cost plus x% margin. This creates more competition among IPPs.

Since the government claims it cannot disclose the IPP agreements as it is not a party, for me the only resort is to VOTE out the BN and lift the veil of the OSA secrecy that it itself imposed on the agreements.
We should also have a public inquiry on the sacking of the TNB Chairman at the time IPPs were sponsored by the government.

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