Wednesday, November 25, 2015

Blame it on A Kadir Jasin, Tony Pua and Rafizi


Edra should not be sold to foreigners and it should be given to TNB. Our nationalistic stance has not changed since the two postings here and here.

Policy set to limit foreign ownership at 49% should be respected without any exception till policy is changed. There are basis to change policy since countries like Indonesia, Singapore, and Australia have open up power generation for 100% foreign ownership.

Unfortunately, Government decided to sell Edra to China-Qatar JV, CGN Group at RM9.83 billion. Before anyone, including TNB management and staff union, blame Dato Najib and his government, please not.

If there is a blame, blogger Be Da Man was right to blame it on Dato Abdul Kadir Jasin. He was reported by MMO of applying pressure on TNB not to bailout 1MDB. Thus TNB cannot up it's bid to compete out of fear of being accused bailout.

Blame also on Rafizi and Tony Pua for spooking the bankers, EPF and other public fund, and SC. At about RM18 billion, it is not bad for a subsidiary once described by Tun Dr Mahathir and Tony Pua as overpriced, "scrap metal", "worthless" and "for a song".

Tun M should not complain on Edra because his "strategic" pet project, Perwaja was bailed out by China too without any noise from his truly. 

So the protun bloggers and facebookers resort to lying to fault the government by claiming government sold the Edra at a loss of RM8.17 billion.


The cost of RM18 billion for 1MDB to acquire include assuming the RM6 billion debt of IPPs. But they intentionally not include CGN has to assume debt of RM8 billion.

Actually, 1MDB came out breakeven or with a slight profit after counting for the cashflow, interest payments and profit from operation. What can be expected for a long term investment meant to maintain electricity cost but had to be abandoned after it only got started?

1MDB has got their back against the wall and the only option left is to sell it to foreigners. The blame for 1MDB getting out of IPP and all options available to 1MDB blocked must be laid on Kadir Jasin, Tony Pua and Rafizi.

TNB

TNB Union seemed to be patriotic and political to oppose the China takeover and directing blame only on government. But they are silent on the 3-stooges trio. Why the silent on the recent YTL IPP three-year extension when it was them that did a demo in June 2014 with all the emotional outcry?   

As recent as 2014, the dividend due to a small shareholder of YTL Power, Bara Aktif Sdn Bhd
is as below:


Who is Bara Aktif? Read protun friendly media, Kinibiz here. It surprises us TNB Union was quiet.

TNB staff cannot be too dramatic but face the reality that TNB cannot remain dominant in power generation. The inevitable is it could be broken up like Telekom to achieve efficiency in a world trade barriers are broken down.

Eventually competition must be introduced to bring energy cost down. Something that cannot be done in a monopoly. It was the essence in the formation of 1MDB Energy (predecessor to Edra).

As one industry player described the power business, it can be segmentalised into power generation, distribution and transmission. TNB still control PPA, distribution and transmission. They have monopoly as single license holder for importation of coal. Gas and petroleum source is still held by Petronas.

This comfortable position for TNB may not last forever. TNB Union must wake up and be more resilient than rhetorical.

Our fear is China could hold us at ransom. Government side argued it is only still 14%. TNB still control 50% and Malakoff at 20%. There is presently 25% buffer. Datuk Seri Maximus Ongkili said sales to China would not jeopardise national security. Hope he knows what he is talking about.

Apart from the sabotage from Kadir Jasin, TNB is not in the best of position to do so. TNB still has a RM21 billion financial commitment to build 3 more IPPs, including the one 1MDB won and had to give it away.

So buying Edra could stretch TNB's finances and goes back to affect staff bonus. TNB Union should admit that some of Edra's IPPs are abroad and TNB does not have the best of track record in turning around IPPs abroad.

Other than TNB, there are too few local bidders.

Let say to give crony YTL a chance. They already said there is no meat and only sop tulang.

They only come in when land is given cheap, energy heavily subsidised, PPA rate high, ABB run the plant, local bank offer loan at cheap rates, "bribe" project paper from inside and top leadership is in their pocket. YTL taukeh is only in the habit of shaking leg and watch Chippendale shows.

Malakoff is at full capacity already. It must be a thick juicy steak to convince their bankers.

There is not much option left. As MyKMU correctly put, "jual kat sapa pun, tetap jadi isu".

1MDB


CGN has not rule out possibility of listing Edra. So do not blame Najib or 1MDB if they made money. Malaysians themselves do not want their 100% government owned company to make money.

Edra was to be listed as far back as December 2013. The then CEO Dato Shahrol was bloody greedy. He wanted to list together with the 3B new IPP thus delayed the listing for 2014. By then, Tony Pua and Rafizi smell of it. With help from Dato Nazir Razak, they railroad the plan.

The lesson for Shahrol: "One in hand is better than two in the bra." He is due to appear at PAC on November 30, Monday.

For 1MDB, it would be best to hold on to Edra and carry out the socio-economic agenda planned. Edra is still the cheapest tariff among all IPP including that of TNB. It's PPA is at RM0.34 sen which is a sen lower than TNB. This reduce cost of TNB by RM2.9 billion.

There is a story to tell because it is an ongoing concern and value can be created.

By right, the best option is to spread the benefit of Edra with EPF and other public fund. One corporate player highlighted that 1MDB was using Islamic bond thus it is of no advantage to pre-pay the Islamic bond. There is no reduction in "interest" or profit to be paid.  

Unfortunately, Rafizi spooked EPF. The black hearted blogger, The Benchmark sabotaged Lembaga Urusan Tabung Haji. Bet he has not a single sen of savings in Tabung Haji.

By the same hand and bra principle, the immediate choice for 1MDB is to reduce the debt burden, stop the negative carry and solve the cashflow mismatch. Arul Kanda would have viewed IPP investment as limited shelve life and upside compared to "unlimited" potential of TRX and Bandar Malaysia.

Edra sales is an important acid test for 1MDB rationalisation and in getting back confidence. TNB shares rose today on the announcement. Not something we wanted but market take it as a good decision.


1MDB was expecting between RM16-18 billion and it got exactly RM17.83 billion from sales to CGN. Sources within the authorities said they cannot go for international bidding where TNB bid for 100% but the international bidders went for 49%.

TNB came too low at RM15 billion. They are familiar with the Edra plants and knows the future technical and financial needs. However, RM2 billion extra is hard for 1MDB to resist. Not something we wanted.

Again, one in hand is better than two in the bra.

Macro

Maybe it is part of pre-empting the government announcement, but Bernama report below has some valid points especially in getting realisable FDI:
Foreign Control More Good Than Harm, Say Analysts

By Azlina Aziz

KUALA LUMPUR, Nov 19 (Bernama) -- Foreign control of utility companies can be good for the industry as well as serve the national interest, say energy analysts and observers.

They noted recent concerns raised by some quarters on the speculated sale of power assets to foreign investors and felt such concerns did not consider the reality of the industry.

A researcher told Bernama, "The energy business is never as free as the operators may want it to be due to strong control mechanism, licensing and multiple regulatory bodies, including the Ministry of Energy, Green Technology and Water and Energy Commission."

For instance, he said, tariffs for the existing Independent Power Producers (IPPs) are fixed under the long-term Power Purchase Agreement (PPA) for the life of the PPA, and any revision to these tariffs will require the consent of EC and Tenaga Nasional Bhd (TNB).

He pointed out that there is also the primary fuel supply for the power plants which must be sourced from government-linked or controlled entities.

Currently, TNB controls coal supply and Petronas supplies gas.

"Gone are the years when a particular IPP could dictate 'take or pay' on TNB. Today TNB, which has total control of the National Grid, calls the shots. TNB will buy what it needs and not whatever IPPs produce," he said.

He stressed that TNB has full control over IPPs, foreign or local, because under the PPA, TNB could step in to take over the operations of a plant in the event of contract breaches.

Asked if foreign companies could use lower cost structure (from economies of scale) to undermine local operators, he said they must first have a huge market share in terms of capacity and fuel usage.

In the case of Edra Global Energy Bhd, which is now up for sale, its effective share of installed generating capacity in Peninsular Malaysia is only 14.6 per cent, significantly behind market giants TNB (50 per cent) and Malakoff Corporation Bhd (25 per cent).

For fuel share in Peninsular Malaysia, Edra utilises around 17 per cent for total gas-fired capacity and approximately 15 per cent effective share of total coal-fired capacity. And it has no hydro plants.

"With such a marginal share, Edra poses little threat on all fronts, especially in view of TNB's dominant and unique market position across all three segments of fuel supply, generation and transmission, its robust financial strength (total assets of more than RM110 billion) and familiarity with the local IPP industry," he said.

He also allayed fears that Malaysians would lose their jobs, saying there is no evidence to suggest that foreign companies would bring in foreign workers to replace Malaysians.

The Malaysia Investment Report by the Malaysian Investment Development Authority (MIDA) states Malaysia had approved investments of up to RM235.9 billion in 2014 which could potentially create about 178,360 job opportunities.

Foreign investments formed 27.4 per cent of the total investments (RM64.6 billion).

It is notable that many countries, including Singapore, Australia, Indonesia and the United Kingdom (UK), permit 100 per cent foreign ownership of power generation plants.

Hong Leong Investment Bank Research's energy analyst Daniel Wong was reported to conclude that even if the assets were sold to foreign companies, TNB would still remain a defensive stock and its role in the transmission of the nation's electricity would not be jeopardised.

Economist Professor Dr Hoo Ke Ping recently said giving the country's energy sector to foreign countries would open the sector to shielded growth.

"Giving the IPPs to foreign control means that we are allowing foreign investment into the country. Without foreign investment, it is not easy for the country to achieve growth," he said.

Stressing that the world is globalising and opening up, Hoo said the country had also been opening up to the global market ever since the government agreed to the Asean Free Trade Area (AFTA) in 1992.

-- BERNAMA
Maybe it is time to reflect back on how the second Prime Minister and Najib's father, the late Tun Abdul Razak wade us through the Cold War in peace and harmony without any major casualties.

* Updated 9:44 AM 26/11/15

14 comments:

Anonymous said...

ABIW,

Asalnya tiga orang itu nak 'pukul anak sindir menantu'. yakni sakitkan sianak dengan harapan menantu terasa kesakitan berkenaan. sesiapa saja yang nak beli EDRA (termasuk TNB) akan di'pukul' -- mahailah, barang busuklah, dsbnya-- dan tujuannya ialah supaya MDB1 tak laku dan melingkup.

Al-malangnya, EDRA laku macam pisang goreng panas dan pembelinya bukan pihak yang dipukul tetapi orang luar. Ia satu yang tidak terfikir oleh mereka. yakni pukul anak sindir menantu telah tidak menjadi. malu pun datang!

Kini baru 3 orang itu sedar iaitu 'pukul anak sindir menantu adalah satu kesilapan. Apa tidaknya, menantu yg di pukul tidak sakit tetapi anak sendiri yang dapat sakit. cumanya tidak menyesalkah pukul anak sendiri semata-mata nak sindir menantu?

Jabalnur said...

Funny though, why should those who are outside, with no executive powers, (whose comments may have scare the banks?) take the blame?
And you would think that the banks are so stupid to recognize a viable project such as National Electrical Power Generation would be impacted by negative comments of critics, the project's profitability?

Anonymous said...

Really?

drMpower said...

very bad for your heart if you continue with perangai buruk like this. instead of cursing those people you should take a step back and see what exactly cause these stupid decisions

sell to tnb is stupid option. to the chinese stupid as well. so what happen along the way that left us with two stupid decision?

no need to think. it is 1mdb stupid business plan. they failed to get it listed not once but twice. what the hell was that. shahrol or whoever, it is very clear that 1mdb is the root of the problem here

why we need to decide on these two stupid plans? it is because 1mdb needed money. why 1mdb need money? because their business is so bad. and u know when they got the monies and be able to pay off debts arul kanda and najib will come out thumping chest and claim victory. and of course some potshots.

hahaha if only they stick to the french power plant idea. and really do business.

what a waste of church

tom dick & harry said...

Hahaha....

amir zahini Sahrim said...

Check on comments that china and tnb not same level playing field....which one to believe?

Anonymous said...

Totally agreed that they have no executive powers, only noise. The bigger question which till today has not been able to answer is how can anybody so stupid to put so much money in one personal account?

Anonymous said...

Another side of the coin:
Anonymous [damansaraman] said...
"I know you (Rocky's Bru) are trying hard to defend the Government, but unfortunately you are missing the point altogether.
IPP was said to be the hallmark of the wrongs of Mahathir’s era. Ani Arope’s criticism towards the decision was used many times to justify the sentiment.
Tenaga has always been anointed as the right single party to power generation, transmission, and distribution business in this country. And it is rightly so as power industry should be classified as a strategic security business in the first place.
For that, I concurred that Mahathir has made a wrong decision on IPP.
Yet, instead of waiting for the 1st generation of IPPs’ agreements to end and let them die of natural course, Najib decided to extend their existence.
To make it worst, instead of buying the rights and pass it over to Tenaga, Najib decided to sell the whole lot to a foreign entity.
So instead of righting the wrong, Najib just made it worst.
THAT IS THE ONE WE SHOULD BE CRYING OVER. SOB!!!!"
9:50 a.m.

vinnan said...
This comment has been removed by a blog administrator.
Hantu Gigi Jarang said...

Sour grape

Anonymous said...

Salah A
Salah B
Salah C
Salah D....Z
Tapi PM, Menteri Kewangan, 1MDB tidak salah dan tidak akan salah

Anonymous said...

Hello???? 1MDB terpaksa jual Edra sebab halangan dari Pembangkang esp Tony Pua de Celaka One n Rafizi the Sotong sebab any government institutional yang hendak beli Edra semua akan kena kecam dari both of them.. TNB ank beli, Rafizi kata TNB bailout 1MDB, KWSP nak beli, Rafizi tuduh nak Bailout, Tabung Haji beli tanah TRX, Rafizi kata nak Bailout 1MDB.. Sebab apa mereka just target 1MDB??

Sebab 1MDB paling banyak pegang tanah dan aset bernilai tinggi.. kalau harga saham 1MDB, nilai hartanah dan aset 1MDB jatuh,, Rafizi dan Tony Pua akan cakap, 1MDB dah lingkup, kasi habis wang kerajaan.. then bila 1MDB sell out all aset below the original costs, both of them will speaks louder says Najib kasi lingkup negara thru 1MDB.. padahal mereka punya kerja sampai 1MDB xboleh buat bisnes...

Ada mereka whistleblow pasal YTL yang tipu TNB pasal IPP?? ada mereka whistleblow pasal Perwaja Steel yg di bailout oleh Proton?? even now Proton pon dalam kategori nak lingkup sebab early 2015, Proton rayu bantuan dari kerajaan pusat utk bailout financial mereka.. but rejected by Najib

Sir Faiez Ali said...

Yesza. Spot on.

Anonymous said...

Pembangkang akan terus bangkang segala keputusan kerajaan. Itu fakta. Manakala pro Tun pula hanya pandai meng ya kan sahaja kem pembangkang. Sebab tujuan mereka hanya mahu menjatuhkan presiden UMNO. Nak cari sendiri tak pandai sebab bengap sangat. Cuba cari urusniaga yg melibatkan perpindahkan ke akaun yg meragukan. Dah jadi satu kes. Ini kisah duit masuk yg dipertikaikan. Yg puncanya jelas diketahui umum dari Arab Saudi. Nampak sgt kelompok ni dlm bahaya kerana kebodohan. Mereka hanyalah tool kepada kapitalis cina yg sdg menekan kerajaan. Siapa suruh beri semua kontrak pada kroni cina? Hancur masa dpn rakyat. Itulah mantan PM.

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