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Wednesday, July 5, 2017

Edra IPO: Rahman accuses Rafizi of 'economic sabotage'

PKR vice-president Rafizi Ramli's suggestion that public investment funds should shun the Edra Power Holdings Sdn Bhd's initial public offering (IPO) has been likened to "economic sabotage".
Minister in the Prime Minister's Department Abdul Rahman Dahlan said Rafizi's suggestion could undermine the confidence of foreign investors and influence Edra Power Holdings and other companies to abandon plans to list on Bursa Malaysia in favour of other countries.
"I urge Rafizi to retract his call for such a senseless boycott... This dangerous and callous action can be construed as economic sabotage.
"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," said Abdul Rahman, whose ministerial portfolio includes the Economic Planning Unit.
Rafizi had urged public-owned funds such as Employees Provident Fund (EPF), Lembaga Tabung Haji, Retirement Fund Incorporated (KWAP), Social Security Organisation (Socso), Permodalan Nasional Bhd (PNB), Khazanah and Mara to avoid investing in Edra Power Holdings.
The IPO is expected to take place in November and raise about RM5 billion.
Edra Power Holdings is Malaysia's second largest electricity producer. It total, it owns 13 power plants, including nuclear power plants, across five countries.
The company was formally owned by 1MDB, before being sold to China General Nuclear Power Corp in late 2015. This was part of 1MDB's asset stripping exercise after the company struggled with cash flow problems.
Rafizi had urged public-owned funds to avoid Edra Power Holdings in order to prevent themselves from being involved with the 1MDB affair for a "second time".
According to Abdul Rahman, Rafizi had failed to appreciate how 1MDB, through its energy companies, had fulfilled its mandate to reform the independent power producer (IPP) industry.
"(The opposition had once) said there were many lop-sided agreements in favour of the concession companies.
"Coincidently, 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 to Rafizi," said Abdul Rahman.
He added that 1MDB had consistently placed the lowest bid for every new power purchase agreement (PPA) or for the renewal of PPAs.
"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 sweetheart deals for the IPPs are now history.

"For Rafizi's information, savings arising from the fairer PPA rates to TNB and Petronas gas subsidies - and by extension, to our government - is estimated to be as much as RM200 billion over the next 20 years," he said.
He said that such savings were now being used for other projects that benefitted the public while keeping the price of electricity low.
"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," he said.- Mkini

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