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Thursday, September 27, 2012

Purchase of IPPs by 1MDB 'not a concern'


The recent purchase of two independent power plants (IPPs) by the state-owned 1Malaysia Development Bhd (1MDB) is not a "concern" for the Energy, Green Technology and Water Ministry, its minister Peter Chin says.

What the ministry is more concerned about is the unit price of electricity to be sold in the market under a selective bidding process for new power purchasing agreements with the first generation IPPs, which will be announced soon.

NONE"Who owns these units of (electricity) generation capacity is not really our great concern.

"What is our great concern is the process of competitive bidding for the unit price at the end of the day. That is our concern," Chin said after officiating the 4th national energy forum in Kuala Lumpur today.

He was commenting on the 1MDB decision to purchase two IPPS - Tanjung Energy Holdings Sdn Bhd and Genting Sanyen Power Sdn Bhd - respectively from local tycoon T Ananda Krishnan and Genting Group.

Both companies are among the first generation IPP concessionaires, with which the power purchase agreements will end in 2016 and 2017. The government is now in the process of bidding for selective renewal of the power supply agreements.

The opposition Pakatan Rakyat has slammed the purchases of the IPPs as not sensible and questioned why 1MDB paid more than average prices for the ageing assets, of benefit to only "a small segment of cronies".
"That is their angle, but our angle is we want the lowest price when the electricity is supplied to the grids," Chin responded.

He also said he could not speculate whether the motive of 1MDB in the IPP purchases was to help the government in achieving energy security.

Recommendation on bidding submitted


Malaysia Energy Commission chairman Ahmad Tajuddin Ali, who was also present at the press conference, confirmed that the commission has submitted its recommendation on the selective bidding to renew the first generation power purchase agreements to the government.

However, Ahmad Tajuddin refused to reveal any further information.

"This is the government's decision (on who will win the bid)," he said.

According to media reports, TNB's five first-generation power plants and five private power companies have qualified for the restricted bidding.

Besides Genting Sanyen and Tanjung-owned Powertek Bhd, the other private players are YTL Power Generation Sdn Bhd, Segari Energy Ventures Sdn Bhd and Port Dickson Power Sdn Bhd.

Only 50 to 60 percent of the capacities of the first generation IPPs are to be renewed.

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