Tadmax to go it alone in Pulau Indah power plant project

KUALA LUMPUR: Tadmax Resources Bhd, which is confident of returning to the black in the current financial year ending Dec 31, 2017 (FY17), will develop a 1,000MW-1,200MW combined cycle gas-fired power plant (CCGT) on its land in Pulau Indah, Selangor, without the participation of Tenaga Nasional Bhd (TNB).

However, the conditional award of the project last year by the Energy Commission (ST) to Tadmax, which is not a player in the power industry and has not built a power plant before, seemed to hinge on the participation of TNB in the consortium.

Tadmax managing director Datuk Seri Anuar Adam said it is not partnering TNB and is embarking on this project on its own, claiming that TNB is not keen to participate given that its hands are full. TNB has not made an announcement on the matter.

“We’ve the technical partner, but we’re not announcing who. We’re keeping it close to our chest. We can do it (CCGT project) on our own,” Anuar told reporters after Tadmax’s AGM and EGM here yesterday.

Tadmax executive director Datuk Noel John said many parties, including big foreign utility companies, are interested to participate in the RM3.5 billion CCGT project.

“But we’ve decided to just delay them and may review it after the PPA (power purchase agreement) is signed,” he said.

Noel John said Tadmax will be submitting a complete feasibility study, which would include environmental and social impact assessments and power system studies on the project to the ST by Aug 17, 2017. Once the ST reviews it, tariffs will be fixed, and after the tariffs are approved by the government, the PPA will be signed.

According to Tadmax’s annual report, the development of the CCGT project will be undertaken by a special purpose vehicle company Tadmax Indah Power Sdn Bhd (formerly Kirana Abadi Sdn Bhd). It will take five years before commercial operation begins.

The estimated cost of the detailed feasibility study for the project submission is RM27 million. In addition, the financial close for the development of the project can only be reasonably determined upon the fulfilment of various conditions such as the detailed feasibility study, obtaining the approval from the Selangor government on local authority matters, the Department of Environment Malaysia, Port Klang Authority and entering into agreements with the relevant utility providers, such as the single buyer department, a government entity that prepares PPAs on behalf of TNB, Petronas Gas Bhd for the gas supply and transmission works agreement with TNB Transmission.

Only upon fulfilling these conditions will the company be able to obtain a letter of award from the ST.

The cost for the project will be partly financed with a portion of the proceeds from the proposed private placement (RM12.5 million earmarked) and the rest by bank borrowings and/or internally generated funds.

“Once the power project kicks in in 2023, that will bring us RM2.5 billion in revenue a year,” said Noel John.

Meanwhile, Tadmax is confident of making a profit this year, from a net loss of RM13.77 million in FY16, helped by its property development business.

The company’s two property projects have a gross development value of RM1.6 billion, which is expected to contribute about RM200 million in profit over five years. The two projects are Ganggarak Permai in Labuan and Mizumi Residences in Kepong.

Tadmax is also in talks to sell its 80,000ha plantation land in Papua, Indonesia.