Saturday, December 18, 2010

IPPs draining Tenaga revenues, says CAP

GEORGE TOWN: The Consumers Asso­ciation of Penang (CAP) has urged the Government to end the outsourcing of power generation to independent power producers (IPPs).

Its president S. M. Mohd Idris said the move was a drain on the resources of Tenaga Nasional Bhd (TNB) and a burden to consumers.

“We believe that TNB has the capacity to produce energy more efficiently and at a lower cost. Moreover, profits coming to TNB will benefit the people and the nation rather than private companies.

“If these companies face financial problems, the Government would be forced to bail them out with public funds to ensure continuous availability of energy,” he told reporters yesterday.

He said the authorities must put pressure on IPPs to revise the terms of power purchase agreements to reduce TNB’s payout to them.

Mohd Idris said a large portion of TNB’s revenue had gone to the IPPs.

“It (the payout) increased from RM9.2bil or 54% of TNB’s revenues in 2005 to a projected RM19bil or 65% in 2010.

“From 2001 to 2010, TNB’s payment to IPPs totalled RM78.3bil,” he said

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