Speech - 1997 Budget committee stage (Ministry of Energy, Telecommunications and Posts)
by Lim Kit Siang - Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjong
in Dewan Rakyat
on Wednesday, 11 December 1996

Most concerned that the government is backing down from its stand that IPPs should standardise their rates so as not to be a burden to consumers and Tenaga Nasional Bhd

DAP is most concerned that the government is backing down from its stand that IPPs should renegotiate their Power Purchase Agreements as some of them had been able to demand very exorbitant rates and unfair terms for the power they sell to Tenaga Nasional, which must finally be borne by the consumers.

In his budget speech on 25th October 1996, the Finance Minister, Datuk Seri Anwar Ibrahim said: “The privatisation programme will fail if opportunities are exploited without regard for social obligations. The Hon. Prime Minister’s call that Independent Power Producers (IPPs) standardise their rates so as not to burden Tenaga Nasional Berhad (TNB) and consumers is an example of the social obligation that needs to be given immediate attention.” (Rencana tersebut pasti gagal seandainya peluang penswastaan dikerkah secara kong-kali-kong atau persekongkolan. Gesaan Perdana Menteri umpamanya, supaya penjanakuasa elektrik persendirian [IPP] menyeragamkan kadar bayaran supaya tidak membebankan Tenaga Nasional Berhad [TNB] dan pihak pengguna perlu diberi perhatian segera)

It was reported last Friday that IPPs had made several proposals to the Energy, Telecommunications and Posts Ministry as to how they can share social responsibilities with Tenaga Nasional Bhd by supplying electricity to the rural areas to ease the burden of Tenaga.

Two days later, the Minister for Rural Development, Datuk Annuar Musa disclosed that all IPPs would be required to contribute to a fund for rural electrification and that their contribution would be several million ringgit each.

In his budget speech, the Finance Minister had asked IPPs to do two things: firstly, to be fair to consumers by standardising their rates, which range from 11.8 sen per unit for Genting Sanyen Power Sdn. Bhd. to 15.5 sen per unit for YTL Power Generation Sdn. Bhd.; and secondly, to be fair to Tenaga Nasional by performing their social obligation to contribute to rural electrification.

It would appear that the IPPs had been easily let off from the first task of standardising the varying rates they sell their electricity to Tenaga, and are only required to contribute a few million ringgit each to help in rural electrification - although I understand that in the latest IPP licence issued to Automan for a 1,200 MW power station in Yan Kedah, the unit cost of electricity is only 11.3 sen.

A contribution of a few million ringgit from each IPP is a paltry sum, as Tenaga is reported to have paid RM2.26 billion for IPP electricity in 1996, double the previous year’s RM1.065 billion.

If the IPPs are required to reduce the exorbitant rates they sell electricity to Tenaga, as the cost of generating power by Tenaga is well below 10 sen per unit, a huge sum could be saved which could not only be used for the purpose of rural electrification but also to lighten the burden of the consumers.

As an example, if the average cost of IPP’s rates are reduced by one sen per unit, based on the RM2.26 billion which Tenaga had to pay IPPs this year, it would mean a saving of RM135 million - as compared to the few million ringgit which IPPs are asked now to contribute to rural electrification.

In actual fact, I understand that there are companies which are prepared to generate and sell electricity to Tenaga Nasional at less than 10 sen per unit, which the government would have been able to take full advantage if it had called for public tender and invited bids for intending IPPs and signing Power Purchasing Agreements with those offering lowest sale price per unit of electricity, instead of entering into secret IPP deals with selected companies?

If all IPPs had been required to charge no more than 10 sen per unit for the electricity they generate and sell to Tenaga Nasional, it could easily come to savings running into hundreds of millions of ringgit!

I call on the Government to remain firm in its demand that the IPPs should fulfil two tasks, to be fair to consumers by standardising their electricity rates to Tenaga and to make their social obligation by contributing to rural electrification

In this connection, I want to ask why Tenaga Nasional is not prepared to post a daily bulletin of power interruptions, giving place, period and reasons for the power interruption, to highlight its sense of accountability to the consumers for any powerful failures.

What is the outcome of the studies by the British experts into the August power blackout in the whole of Peninsular Malaysia, and why is the Tenaga Nasional not prepared to conform to ISO 9000 quality standards - especially as the chief executive officer, Datuk Ahmad Tajuddin had headed SIRIM responsible for the popularisation of ISO 9000 quality standards in all sectors in Malaysia.

Despite all the favourable publicity in recent months,Tenaga Nasional has not been able to provide a steady power supply - as evidenced by the numerous power interruptions in Kuala Lumpur recently.

I understand that Tenaga Nasional would be asking the government to approve a new round of electricity tariffs increase next year, and I would urge the government to reject such application, especially if Tenaga Nasional is unable to improve on the quality of its service in reducing the high incidence of power interruptions as well as it is unable to get the IPPs to reduce the selling price of its electricity to Tenaga Nasional and lighten the burden of the consumers.

In this connection, I wish to ask whether the Government has any plans to further divest and reduce its present 77 per cent shareholding in Tenaga Nasional Bhd.,and what are its plans on the issue.

What is the outcome of ACA investigations into Tenaga Nasional underwater logging contract worth RM300 million

In October, I had referred to the report by Tenaga Nasional’s board audit committee which had queried mismanagement and abuses of power in Tenaga Nasional Bhd, including irregularities in the award of a contract for underwater logging at the Temenggor Dam in Perak, which allowed Affcom Timber Sdn. Bhd. to log about 8,000 hectares of timber submerged in the dam worth about RM300 million, although the company was not even registered when it was awarded the tender.

I have not received any reply as to the investigations by the Anti-Corruption Agency into the Tenaga Nasional tender for underwater logging in Temenggor and hope that the Minister could give a report on this matter, both as to outcome of ACA investigations as well as whether new tenders had been called. The halving of growth of Internet users in Malaysia this year must be regarded as a major setback for the national IT drive

Two days ago, the Minister for Science, Technology and Environment, Datuk Law Hieng Ding, disclosed in Parliament that there are as of now over 50,000 Internet subscribers with Jaring.

This is a most shocking figure, as with 15,000 Jaring subscribers at the end of last year, and growing at a rate of 22 per cent per month, MIMOS had expected Jaring subscribers in Malaysia to reach 150,000 at the end of this year.

However, as there is only an increase from 15,000 to 50,000 Jaring subscribers in the first 11 months of this year, this means that the rate of increase of Jaring subscribers had fallen from 22 per cent per month to 11 per cent per month, which must be regarded as a major setback for the national IT drive - even when taking into account that there is now a second Internet Access Provider, TM NET, which only started service in November.

I agree that a growth of 22 per cent per month for Internet subscribers for 1995 was exponential growth, which must stabilise after a certain point - but certainly not now, when the country has still to achieve a full take-off of Internet take-up rate in the country.

I have no doubt that one of the primary reasons for the sharp drop in Internet take-up rate of Malaysians is the high costs of telephone bills, and I would urge the government to seek a solution with the objective of positioning in front-rank of nations in terms of per capita use of Internet. Call on Telecommunciation Companies in Malaysia to make their social contributions by providing free Internet facilities to all the schools

I will like here to call on the Minister for Energy, Telecommunications and Posts to take the initiative to get the telecommunications companies in Malaysia to make their social contributions by providing free Internet facilities to all the schools.

In the United Kingdom, it has been estimated that by the end of the decade, almost three-quarters of the schools would have been cabled free of charge by cable companies - and there is no reason why the telecommunications companies in Malaysia should lag behind their counterparts in the UK in terms of their social commitments and responsibilities.

What is the need for a National Telecommunications Council when there is already a NITC and both are chaired by the PM

I am surprised by the announcement by the Minister last month of the establishment of a 18-member National Telecommunications Council, headed by the Prime Minister, Datuk Seri Dr. Mahathir Mohamed to be responsible for a National Telecommunications Policy.

This is because the country already has a National Information Technology Council, which is already headed by the Prime Minister himself, and the formation of another National Telecommunications Council seems to be a redundancy or a mere battle over turf by different Ministries or government agencies over primarily overlapping subjects.

The formation of a National Telecommunications Council appears to be trying to put the clock backwards in the Digital Age, ignoring the convergence of telecommunications, broadcasting and information technology, where the computer will evolve into an information applicance combining the functions of the telephone, computer, TV and more, which is posing new challenges to the way society works as well as how government is structured.

This is why in some countries which are aiming to fully exploit the new challenges of the Digital Age, like South Korea, there is a restructuring of their Ministries where the Ministry of Information and Communications had been set up to develop and implement long-term strategies for the South Korean ‘infocommunications” industry.

Has Indonesia given consent to the passage of 1,300 km Bakun submarine cable from Sarawak to Peninsular Malaysia through the Indonesian economic exclusive zone

Finally, I want to refer to the fourth part of the Bakun dam project on the submarine cable, which had not yet been given the EIA approval. I hope the Deputy Minister can explain whether the Indonesian Government has given consent to the passage of the 1,300 km submarine cable for the Bakun hydroelectric dam project between Sarawak and Peninsular Malaysia which had to pass through the Indonesian economic exclusive zone in Natuna.