What Happened In 1992 That Led To Malaysians Paying More For Electricity?
(Malaysian Digest) – While the present government has been working hard to ensure electricity rates will not burden consumers by guaranteeing tariff rates in the Peninsular remain unchanged till 2020, what Mahathir did 26 years ago had more than tripled the cost of electricity.
The late Tan Sri Ani Arope, former CEO of Tenaga Nasional Berhad (TNB) had revealed in his memoirs back in 2014 that the nationwide power outages in 1992 which lasted several days could have been deliberately staged to give the ruling government back then a reason to privatise power generation and thereby enriching a few individuals close to then prime minister, Tun Dr Mahahthir Mohamad.
In the words of Mahathir himself who memorably read the poem ‘Melayu Mudah Lupa’ at the UMNO General Assembly, perhaps what happened over 20 years ago may have been forgotten but the impact of Mahathir’s actions is felt by all Malaysians until today when we pay our electricity bills.
The former TNB CEO revealed this in his 143-page book ‘Memoirs of Tan Sri Ani Arope’ when he described how Independent Power Producers (IPP) came to dominate in the business of supplying electricity to the rakyat, instead of TNB.
He recalled that although TNB had the funds, expertise and manpower to built the additional plants needed to meet the nation’s future power supply needs, Mahathir had his own plans.
The Economic Planning Unit (EPU), which was under the power of Dr Mahathir Mohamad at the time, forced TNB to hand over land in Paka, Terengganu and Pasir Gudang, Johor, to third parties to construct power plants, Ani said in an interview with StarBiz after his memoir was published.
The excerpt of the interview was actually republished by Selangorkini, a publication under PKR’s Selangor state government.
“TNB had plans in place to pump out more energy by building plants in Pasir Gudang and Paka. Financing was no problem and our credit standing was very high. We had the land acquired and were ready to move in and plant up.
“But we were told by the Economic Planning Unit (EPU) that it had its own plans. We cautioned EPU that if those plants, which would take two years to complete, were not built, Malaysia would get another major blackout,” he said.
Ani went on to reveal how the entry of the IPPs forced TNB to hike up its tariffs where previously TNB produced energy at 8 sen per unit (kwh) and could deliver electricity at 17 sen per unit but after the IPPs produced electricity at 23 sen per unit, TNB was forced to charge the consumer at no less than 30 sen per unit.
There was no negotiation and the agreement resulted in 20 million consumers in the years to have no choice but to pay higher electricity tariff, Ani revealed.
Not just consumers were forced to enrich the pockets of the IPPs but government coffers as well as Ani points out that PPs received gas subsidies amounting to RM8.1 billion from Petronas (based on its 2008 Annual Report), while TNB received RM5.7 billion.
What was even more alarming was that the government under Mahathir had negotiated lopsided terms with the IPPs that saw TNB pay over market value for excess power generated as Ani said the IPPs produced more that 40% over capacity which cannot be stored but TNB was forced to continue to keep paying while the extra power was simply wasted as it could not be stored.
“After that, my team was disappointed. The EPU just gave us the terms and asked us to agree. I said no way I would,” Ani said he was asked to resign shortly after.
While Selangorkini had no problem running the damning expose implicating Mahathir’s role in enriching the IPPs back in 2014 and PKR’s vice-president Rafizi Ramli heaped criticism on Mahathir’s IPP cronies back in 2011, suddenly it all went silent after Mahathir returned to politics on the Opposition’s side.
Political analyst Lim Sian See (LSS) noticed this sudden shift in the Opposition’s stance in a blogpost back in November 2016.
LSS pointed out that the Opposition were caught in a bind as on one hand, they had to fall in line with Mahathir’s unrelenting attack on 1MDB in his bid to bring down Prime Minister Datuk Seri Najib Razak’s government but at the same time could not acknowledge the state investment fund’s role in removing the IPPs monopoly on power supply and allowing profits to go back to the government and ultimately, the citizens of Malaysia.
