Awer: Do cost-benefit analysis before lifting power assets foreign stake cap

PETALING JAYA: The Association of Water and Energy Research Malaysia (Awer) has urged the government to come up with a cost-benefit analysis before it does away with a 49% foreign investor cap for power assets, and questioned whether 1Malaysia Development Bhd (1MDB) has been given approval to sell development rights, in the government’s haste to address the strategic investor’s financial woes.
According to Awer president S Piarapakaran, if the 49% cap is waived and foreigners buy over 1MDB’s energy assets, it means close to 18% of the country’s electricity generation assets will be in foreign hands.
1MDB’s existing energy assets in Malaysia have an installed capacity of 3,112MW and non-existing power plants (Malacca CCGT and solar project) with 2,500MW are believed to be included in the current bidding process.
Even though the non-governmental organisation maintains that the government should not do away with the foreign investor cap, Piarapakaran said, an analysis must be done to determine the short-term and long-term cost-benefit comparing both local and foreign ownership, if it is to happen.
He added that issues which need to be considered include foreign direct investments that will be brought in; new job opportunities created for locals; impact on local suppliers or manufacturers from upstream to downstream of the industry since the foreign investors may bring in their supply chain; and actual income that will be generated for Malaysia.
Piarapakaran urged that the quantitative findings of such a cost-benefit analysis be published and shared with all stakeholders as soon as possible to ensure the interests of the people and the nation are protected.
Meanwhile, Piarapakaran said the inclusion of both Track 4B, which is a 2,000 MW combined cycle gas turbine (CCGT) in Malacca, and 10 x 50MW utility scale solar power plants, which are yet to be constructed, that were awarded via direct negotiation to 1MDB last year, in 1MBD’s energy assets sale, goes against the Energy Commission Act and the Electricity Supply Act.
“Did the Energy Commission allow such sale of power plant projects’ development rights for monetary value? If yes, such an act by the Energy Commission is against its functions and duties stipulated in the Energy Commission Act and the Electricity Supply Act.
At the same time. If the sale of power plant projects’ development rights for monetary value is allowed, this will pave the way for a similar application from owner of delayed Track 4A (a 1,000-1,400MW CCGT) to sell its rights to develop power plant to another entity for quick bucks,” he said.