Rafizi's misinformed scare-mongering of 1MDB's Edra impending sale


Today, PKR’s Rafizi Ramli made a statement in Parliament about the possible sale of 1MDB’s Edra to foreign companies.


The problem is that Rafizi has again been very economical with the truth. Here is why:

Rafizi: Electricity tariffs might be raised if 1Malaysia Development Berhad (1MDB)’s Edra Energy is sold to foreign firms, PKR warned today.

PKR secretary-general Rafizi Ramli also alleged that Putrajaya had decided to relax previous restrictions on foreign ownership of energy assets so that consortiums from China and Qatar could bid for Edra at a higher rate than market prices.

LSS: Do you want 1MDB to sell lower and lose RM2 billion so you can whack 1MDB for losing money? And if 1MDB sells to Tenaga, you will say that Tenaga is bailing out 1MDB.

Countries such as Indonesia, Singapore, India, Australia and Thailand allows up to 100% foreign ownership in their electricity generation industry. In fact Thailand currently imports 7% of their power from neighboring countries such as Myanmar and Laos and this is scheduled to go up to 20% in the next two years.

In fact, Malaysia’s YTL is the largest private owner of Singapore’s Independent Power Plants.

Power plants are not like other industries such as shipping or airlines and you can simply pack-up the power plants and send it overseas via DHL or Poslaju. As long as the appropriate legislation and protections are all put in place, there is nothing to fear.

Even having said this, TNB is still the monopoly holder of the most important part of the business – the transmission and sale of power to consumers, thus Malaysia is still firmly in control of the power business in Malaysia.

National security is simply not an issue at all anymore and a very lame excuse from Rafizi Ramli.

As you can see from the list above, out of the dozen or so power plants owned by 1MDB’s Edra Energy, the majority are foreign power plants.
If other countries are not afraid of foreign ownership of their power plants, why should Malaysia be?

Rafizi: Power purchase agreements (PPA) of the IPPS in Edra would be up for renegotiation in 2016 and 2022, and the firms might use the opportunity to negotiate for higher tariff rates to make up for the higher price they would pay. “They can negotiate favourable terms for themselves and no one will know because the negotiations are secret,” Rafizi told reporters at the Parliament lobby.

Rafizi is hopelessly out of touch on this. In fact, his accusation that PPA rates are direct secret negotiation is an outright lie.

Since the year 2012, all PPAs are based on open competitive bidding tender. Here is the announcement by Suruhanjaya Tenaga calling for the tender.

And here is a news story of the results of that open tender.

He noted that the bidding exercise was done in a transparent and open manner with eight parties initially selected with six coming up with final offers for evaluation.

The first-generation IPPs’ PPAs, which will expire between 2016 and 2017, are not being renegotiated and the competitive tender exercise will replace these as the country plans for future energy demand.

Here is the Maybank analysis of the outcome of the open bidding in 2012 that showed that the open competitive bidding for the PPAs have significantly slashed power rates – ending the sweetheart deals of the Mahathri-era lop-sided IPPs,’

In fact, YTL’s two power plants just expired on Sept 30th 2015 and only plant was renewed on a short term 2 1/2 years basis while the other plant was not renewed at all.

This being the age of competitive open bidding, it can be argued that foreign players of substantial size, access to cheaper cost of funds and expertise could even lower the price of electricity instead of raising it – to the benefit of all Malaysians.

Rafizi: The China and Qatar consortium is paying RM2 billion above market value to buy Edra – above Tenaga’s offer.

Dear YB Rafizi, market value is simply what others believe the business is worth and willing to put their money where their mouth is and pay that amount for it.

The sale of Edra was done via an open tender where interest was high and 1MDB had to even kick out some bidders and finally came to a final shortlist of 4 winners – and among all these bids, Tenaga was always at the bottom of the bid price.

And open tender is the best way to determine the market price and whatever price was bid IS the market price.

Instead of saying that the China and Qatar consortium is over-paying, perhaps you should say that Tenaga may have underbid for Edra?

Sell low, you will complain. Sell high, you will also complain.  Sell to locals, you will complain, sell to foreigners, you will also complain.

If I didn’t know any better, the attempt by PKR to stop the sale of Edra to the highest bidder in a competitive international tender sounds like yet another deliberate sabotage by Pakatan of 1MDB’s rationalization plans.

This is not the first time, of course and probably won’t be the last.

In July 2015, PKR’s ally DAP has already done this by stopping the legitimate sale of 1MDB’s RM1.1 billion worth of land in Penang, which DAP controls – thus trying to scupper 1MDB’;s efforts to dispose of assets that is no longer needed to raise cash and pay off debts.

Pakatan is dead-scared of 1MDB being fully resolved.

Recently, 1MDB boss Arul Kanda has stated:

“With RM16 billion from Edra Energy asset sale, at least RM11 billion from Bandar Malaysia bids and RM16 billion debt sale to Abu Dhabi’s International Petroleum Investment Company (IPIC), the existing 1Malaysia Development Berhad (1MDB) debt of RM42 billion is about to be wiped out.”

In fact, not only will the debt be fully wiped out but when the rationalization is complete, 1MDB will hold between RM10 billion to RM12 billion in net assets.

So much for 1MDB heavily in debt or billions of dollars stolen by a fat Chinese man or  by Prime Ministers.

Pakatan seems desperate to drag the 1MDB issue out and continue to make it a political issue against BN and Najib

It is not in Pakatan’s interest to allow 1MDB to be resolved and be seen as successful – even though a resolved and debt-free 1MDB is to the betterment and the interest of Malaysia.

Pakatan’s own selfish political interest seems to over-ride the interest of the country itself.


The question I get asked a lot is:

Why buy the IPP (Independent Power Plants) when they can get it cheap by waiting for it to expire.

1. Out of 15 power plants bought by 1MDB in 2012-2013, only two were close to expiring – the Genting plant in 2016 and the 440MW Powertek plant bought from Tanjing, also in 2016.

So, we wait four years for two plants to expire (out of 15 plants) and wait four years to help restructure the IPP industry and also miss out on the bidding for the additional 3 new plants, is it?

2. The Genting plant got renewed for for another ten years in 2012 – mere months after 1MDB bought it. Everybody knows it will get renewed as it was a relatively new plant. Genting would probably be unhappy that the extension was for so long and gotten so soon after they sold it.

3. The other major purchase was Jimah Energy, the second largest IPP in Malaysia. It was bought by 1MDB in 2013. It started production in 2009 and has a 25 year concession period – expiring in 2034 – not anywhere near to expiry.

4. The 440MW Powertek plant is part of  13 power plants with a capacity of 3,951MW that 1MDB bought from Ananda. Ananda was selling it as an entire package and not piece by piece.

5. The sale of Tanjong’s ppwer assets was by international tender. 1MDB was not the highest bidder for Tanjong. A Saudi Arabia company was the highest bidder.

6. 1MDB may have paid RM8.5billion for Tanjong’s power assets but it had RM1,58b cash in it – hence a net cash outflow of RM6.9b

7. It is not unusual to pay a premium when you take over a company. Nobody sells to you at net asset value – but based on market price, which was set in the international tender.

For example, a most recent example is this: Dubai’s Emirates National Oil Company (Enoc) has made a potential offer to take over Dragon oil at 735p per share – a premium over the share price of 509p at that time.

So, what do you mean over-paid for the assets?

Rafizi Ramli berbohong berkaitan jemputan Majlis Penerangan Perdana

rafizi-tergigit-lidahPada 7 November, Rafizi Ramli berkata, dia tidak akan menerima  jemputan untuk menghadiri taklimat merangkap sesi soalan jawab di Pusat Dagangan Dunia Putra. Hari ini, beliau berkata beliau tidak dijemput ke majlis itu. Kali ini dia benar-benar tergigit lidah. Sila rujuk kenyataan beliau pada 7 November yang mengatakan beliau tidak…


Facebook Comments



Padah benarkan pelajar perempuan ambil gambar tanpa baju

Guru seni wanita, 41, dipecat selepas membiarkan pelajar berusia 15 tahun bergambar TANPA BAJU dan murid lain membuat simulasi melancap dan memegang botol alkohol...

Kesesakan LRT: PH melalak dan merapu sembang fasal dasar pengangkutan awam, rakyat teraniaya

Korang nak tahu tak fasal LRT 3 yang dijangka dirasmikan dan digunapakai tahun 2023 nanti actually tersasar dari jadual asal sepatutnya tahun 2020 dah...

Gol pelik punca Selangor diratah JDT

Ketua jurulatih Selangor FC, Michael Feichtenbeiner menyifatkan dua gol pada awal permainan yang dijaringkan Johor Darul Ta'zim (JDT) mematahkan semangat pemainnya hingga diratah 1-5...

[Video] Jalan sesak akibat Kemalangan 2 lori terbalik di KM 425.7 (arah utara) PLUS Utara di antara Bukit Beruntung & Bukit Tagar.

Kejadian berlaku kira-kira jam 10 pagi di KM425.7 (arah utara) Lebuhraya Plus diantara Bukit Beruntung ke Bukit Tagar. Kesesakan berlaku sejauh 18 kilometer dari Rawang...

Syed Saddiq mempergunakan nama ibu bapa untuk berbohong?

Syed Saddiq didakwa mengeluarkan wang tunai RM1.12 juta secara tidak jujur daripada akaun bank PPBM untuk kegunaan sendiri. Daripada situ, dia menggunakan RM100k untuk membeli...

[Video] Seorang daripada dua remaja hilang akibat arus deras di Penampang ditemukan

Penampang: Seorang daripada mangsa yang dilaporkan hilang selepas dihanyutkan arus deras di Sungai Kampung Pogunon, sejak semalam, ditemukan lemas di Sungai Moyog Kampung Pagansakan...

SPRM akan siasat individu terima dana UKSB termasuk Muhyiddin Yassin

SPRM dalam kenyataan berkata, agensi itu juga mengesahkan sudah menerima beberapa aduan terhadap individu terbabit Siasatan yang akan dijalankan mengikut bidang kuasa yang...

Artis versetile, Adibah Noor meninggal dunia

Ramai peminat masih tidak dapat menerima kenyataan pemergian artis versatile Adibah Nor. Media sosial di penuhi dengan berita pemergian beliau. Berita awal mengenai pemergian Allahyarham...

2 remaja maut motosikal bertembung kereta di Kalumpang

HULU SELANGOR: Dua remaja lelaki maut selepas motosikal dinaiki mereka, bertembung sebuah kereta di Kilometer 75 Jalan Kuala Lumpur-Ipoh dekat Taman Keliang, Kalumpang di...