KUALA LUMPUR, Oct 21 — The Energy Commission said today that the tariff and length of concession for the 1,000-megawatt plant in Tanjung Bin, Johor was determined during the bidding process, denying claims that the government had signed a “blank cheque” for tycoon Tan Sri Syed Mokhtar al-Bukhary.
The federal opposition had accused the Barisan Nasional (BN) administration of awarding the independent power producer (IPP) deal to a subsidiary of Malakoff Berhad, controlled by Syed Mokhtar (picture), without first agreeing to tariff rates and the length of the concession.
The commission said in a statement today the tender restricted to two bids was evaluated solely on “technical and commercial aspects” including “the proposed tariff for the entire duration of the 25-year concession.”
“The tariff and concession period have already been determined through the competitive bidding process. The final tariff that was submitted and approved ... is very competitive compared to similar projects in the region,” it said.
This comes despite the Energy, Green Technology and Water Ministry saying in a written reply this week that the Energy Commission will only finalise the power purchase agreement with Tanjung Bin Power at the end of the year.
Pakatan Rakyat (PR) lawmakers had said the deal awarded to Malaysia’s richest Bumiputera after a limited tender between two bidders “is scandalous, if not criminal.”
But the Energy Commission explained today that the limited tender was due to the need to award the project on time to “achieve commercial operation in early 2016” to avoid “potential brownouts” based on projected economic growth.
PR had said deals such as these led to gas subsidies amounting to RM8 billion being paid out to IPPs.
Putrajaya had in June raised electricity prices by an average of 7.12 per cent in an effort to trim its burgeoning subsidy bill, but promised the hike will not affect some 75 per cent of domestic consumers.
But public anger ahead of an expected general election has been fuelled by the rising cost of living as inflation has persisted at over three per cent since March, a two-year high.
The government has said that despite tariff hikes, it will still spend some RM26 billion to subsidise the gas bill this year.
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