“Rafizi should admit that the government and 1MDB had played a role in helping to solve this legacy problem of lop-sided IPP rates”
KUALA LUMPUR: PKR vice president Rafizi Ramli should retract his “senseless” call to boycott the proposed listing of Edra Energy on Bursa Malaysia as it is an action which could be construed as an economic sabotage.
In lambasting the Pandan lawmaker, Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan said Rafizi’s call also affect foreign investors’ confidence and lead Edra and other companies to abandon listing on bourse.
“This dangerous and callous action can be construed as economic sabotage.
“I urge Rafizi to retract his call for such a senseless boycott that only undermines foreign investors’ confidence in Malaysia, or may cause Edra and other companies to abandon listing on Bursa Malaysia in favour of stock exchanges in other countries.
“Rafizi should leave it to the professional managers of our local funds to decide whether investing in Edra makes business sense to them or if it is in-line with their investment strategies,” Abdul Rahman said in a statement.
He reminded Rafizi that through Edra Energy, 1Malaysia Development Berhad (1MDB) had met its goal to reform the Independent Power Plant (IPP) industry which the opposition had previously alleged riddled with “lop-sided agreements in favour of the concession companies”.
“Ironically those lop-sides agreements cited by the opposition were signed during the reign of a former prime minister who is now with the opposition and a colleague of Rafizi,” Abdul Rahman said in a jab against the opposition’s acceptance of former prime minister Tun Dr Mahathir Mohamad into its fold.
Abdul Rahman pointed out that following 1MDB’s foray into the IPP business, the government initiated an open tender on Power Purchase Agreements (PPA) in September 2012, which is a first in the country.
“1MDB consistently put in the lowest bid for every new or renewal PPA thus helping to push down the PPA price for all other bidders.
“As a result of this, many of the PPAs that were previously alleged to be lop-sided are now made fairer to the extent that a major investment bank had proclaimed in their analyst report that sweet-heart deals for the IPPs is now history.”
Savings from fairer PPA rates for Tenaga Nasional Berhad (TNB), Petronas gas subsidies and by extension the government, is estimated to be about RM200 billion over the next 20 years.
“The results of this are very visible today. Instead of registering losses and requiring government assistance as in the past, fairer IPP rates and terms – which used to make up 40 per cent of its cost – have contributed to TNB now consistently reporting record profits.
“While Petronas’s gas subsidies bill for 2015 is one-third less of what it was in the year 2012 – a savings of RM10 billion. These huge savings are now spent back on projects and welfare that benefits the people while still keeping electricity prices low for everyone.”
Abdul Rahman said the achievements recorded to resolve lop-sided IPP agreements had silenced critics among the opposition 2013. Subsequently, Edra Energy was sold to a foreign investor and is no longer linked to 1MDB.
Abdul Rahman added Rafizi should instead admit that the government and 1MDB had contributed in weeding out previous IPP rates.
“This is also the reason why since 2013, the opposition is no longer talking about lop-sided IPP deals as the current government has solved this long-standing legacy problem of the past through 1MDB.
“Subsequent to this, Edra Energy was sold by 1MDB to a foreign investor via an international open tender. Today, 1MDB is no longer have any business links with Edra Energy.
“Rafizi should admit that the government and 1MDB had played a role in helping to solve this legacy problem of lop-sided IPP rates.”
Source: NST Online