Saturday, July 20, 2013

Something FISHY for the Auditor-General's Annual Report of HORRORS?

This chart is an analysis of two business reports in the Star, Malaysia.

The first section relates to the purchase of power generating plants over two years under the Star article 1MDB in RM1.2bil deal.
The second report was done in China under the Star article
Genting sells Suzhou power plant for RM22.34m

All these deals are being finalised by 2013 and thus the purchases make interesting reading; especially since Genting is involved in two of the deals, namely Mastika and Suzhou.

To explain a little about the table, the "adjust to 100%" is to enable price comparisons as if the entire MW capacity had been bought over.
To do a basic evaluation of the purchases, you need to compare the column "Cost per MW" and this is given in RMmil.
At first sight, it appears that 1MBD has been paying too much for a standard equipment like a power generator.
If you look at the Genting sales, the China deal is almost 10 times sheaper than what 1MBD paid in Malaysia. Was it really on a "willing buyer, willing seller basis'? What was the compelling reasons for such an vast disparity in prices?
It does seem that there has been a very expensive learning curve as 1MDB has managed to reduce the Cost per MW from RM3.27mil to RM1.14mil but even RM1.14mil is three times more expensive than the China deal.

Anyone like to suggest why we are paying so much more for a standard utility? This can only translate to higher electricity tariffs.  

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