Why didn’t Dr M advise the government to sell off its executive jet to save on maintenance and running cost?
He ought to advise the Najib administration to stop funding Perkasa’s racist programmes which is wasting taxpayers’ good money to do something that is not only detrimental to the nation, also against the constitution as pointed out by some lawyers.Cost-cutting often involves a ‘heads must roll’ exercise. This is especially so if it is recognised that the company was severely badly managed and not just confined to operational level inefficiencies.
In such instances, the first to go is often the CEO. Sometimes, in near-crisis situations, the entire management team is replaced.
The rakyat is facing a near-crisis situation with all the price hikes taking place. It is time to kick the CEO out and replace the entire management team.
In the theatrical convention of Mahathir’s politics, the former prime ministerhas scripted to straddle the national stage. He’s the sceptered protagonist, soliloquising on national perils and remedial programmes. Everyone else – partymen or ministers – must play the chorus. They must have one refrain: Yes,Tun Mahathir. behind-the-scenes way of functioning, his detractors lament, denotes ‘leadership deficit’. It’s a charge he recently sought to counter in Parliament, cautioning the DAP against “arrogance”. Mild as it was, this combativeness was unusual. Normally nAJIBh has a signature low-key style, approaching the rare quality of self-effacement in a power-wielder. His political DNA is such he likes to remain in the wings. Or he hovers like a silent, levitating presence over the stage, giving the key lines to other UPA actors.
Right now, UMNO really needs some scapegoats, big, healthy ones. We list a few suggestions for the high command’s consideration.Sins call for atonement, crimes must be punished. And what better, if such redemption can be detached from those really culpable and outsourced to some dumb creature that cannot complain? This was the idea behind the Biblical practice of casting a goat into the wilderness after ascribing all manner of ills and improvidence to it. Many virtues extolled by religion have waned over time; scapegoats have thrived. Najib should all be detached from power
And so Najib is coming into his own, rising and making himself heard. And having risen and developed a voice, he wishes to see change around him fast. That is what is responsible for the phenomena. People are tired of seeing the same old parties carrying on the same old charade in their own individual ways. So you vote for change – but then you wish to see change fast! The expectations riding that change are huge. And so, the backlash in case of failure is tremendous.Najib led the government but could not contain persistent inflation or reverse a crippling slowdown. That there would be corruption in the government is perfectly understandable (how else are parties supposed to mobilise the fortunes they need to function?), but did he even make an attempt to speak up in defence of the government when accused of assorted scams? Now, telecom is a scam in public perception, instead of the genuine revolution – which has spread to the remotest corners of the land, empowered people and raised productivity and economic growth – that deserves to be celebrated.
Dear Tun, wasn’t this what Pak Lah initiated after taking over from you? If you had let him do his job in the first place, the rakyat will not be in this state of affairs.
Pak Lah wanted to save some money and re-evaluate all the so-called mega-projects. He wanted to take the country to a stronger financial footing before re-embarking on some economically driving projects at a later stage, but no one allowed him to do his job
Three months ago when Pak Lah (former PM Abdullah Badawi) launched his latest book ‘Awakening’, Mahathir was unhappy with some of its content where Pak Lah criticised him and stopped a number of his costly projects, such as the crooked bridge and the dual-track railway.
In the book, Pak Lah mentioned that the government will go bankrupt if these projects were allowed to go on. Mahathirresponded sarcastically that he should not have built KLIA (Kuala Lumpur International Airport), the North-South Highway, etc.
Mahathir had been very unhappy with Pak Lah for trying to save money for the government and he seemed to be happy with PM Najib Razak’s spendthrift way.
Now he is doing an about-turn by asking Najib to cut cost after Najib incurred an additional RM300 billion deficit during his last five years as PM and finance minister. Mahathir must have realised that even many Umno ministers and pro-Umno NGOs are unhappy with the sudden multiple price increases.
Mahathir policy vibrant enough to withstand both coercion and bribery to corruption, inflation, black eyes
Mahathir’s cronies has a company to do that for the government at a “reasonable” cost. At just 10 sen profit per bulb, can you imagine how many bulbs there are in Putrajaya alone?And why pay over the top to re-badge old model Honda Accord as Proton Perdana?Are we so shameless? But why pay more?And what happened to keeping Government building air-conditioners at 23 or 24 degrees celsius?Why civil servants still wear jackets in the office?is it to keep IPP in business?
Former prime minister Tun Dr Mahathir Mohamad (pic) today aligned himself with Malaysians who believe that the Najib administration should cut costs instead of raising prices of goods and services.This is what market competition is all about. This is Economics 101 which most of our leaders, including those claiming to be finance wizards, are incapable of comprehending.How do businessmen reduce cost when they are operating in an economy saddled with distortions and colossal rent-seeking practices?How do they reduce energy cost when lopsided IPP (independent power producer) agreements were never rectified and corrected? How do they reduce transportation cost when all the highways are operated by cronies, all of which are also monopolies?
How do they reduce the prices of essential goods such as rice, sugar, flour and cars when subsidies on them were reduced but the monopolies in importation and distribution are still in the hands of the selected few?
How do they reduce transactions cost when businessmen have to grease the politicians at every nook and corner?
How to reduce inflation when so many people are getting fat pays for doing almost nothing (in fact, their contributions to the economy is negative), while those working their butts out are getting pittance?
How to increase efficiency when most of the workers are so poorly trained and motivated?
One thing I do agree – the government could cut its cost (expenditure) by at least 20 percent without jeopardising its output, i.e. without affecting the services it provides to the people.
There is too much fat in the government, either in the form of overpricing or over-purchasing, a topic which I have highlighted in numerous occasions.
Weighing in on the current debate over rising prices, Dr Mahathir said Putrajaya could minimise wastage and improve efficiency by applying a “cost down” concept to manage its growing expenses.
“The Government often wastes money because it is not too concerned about the returns on its expenditure in whatever form… If the Government is interested in reducing the cost of governance, it can do so and perhaps quite substantially.”
For example, the Government could save substantially, more than 50%, if it opted for light-emitting diode bulbs, he added.
“The subsequent reduction in the amount of electricity to be generated will reduce subsidy on fuel for power. But this has not been done by the Government.”
SHOCKING REVEALATIONS by Dr Ani: TNB/IPPs Contracts -ALL lopsided, Raw Deals. NO Negotiations at all. The fingers point back to Tun Dr M
At last Tan Sri (Dr) Ani Arope,, the former executivechairman and chief executive of TNB who was unceremoniously given the boot after being blamed for a major blackout in the early 1990s has at last open his mouth and given his side of the story. He talked to StarBiz deputy news editor JAGDEV SINGH SIDHU in this exclusiveinterview.
It was a win-win and win-win again for the IPPs all along and now the consumers are left with a sick pocket to pay for this excessive electricity charges imposed by TNB but forced on by the IPPs.
This is the IPPs’ contribution, from their website “towards the national development and to work towards achieving the objectives of our Prime Minister’s vision”. The IPPs are course reluctant to renegotiate the pricing in their one-sided contracts (just like the NS highways concessionaires) and the Government can only bait them with again the win-win formula by extending their period of operation.
These are the so-called ‘captains’ of industry who gained their fortunes by political pull, by having government grant them favors and franchises at the expense of their fellow-men.
The Tun’s vision is indeed a “blurred Vision 2020” causing so much problems and hardship. No wonder he asked history to “forget me” in his exclusive interview
The following is a reproduction of the article Ani
SHOCKING REVEALATIONS by Dr Ani: TNB/IPPs Contracts -ALL lopsided, Raw Deals. NO Negotiations at all. The fingers point back to Tun Dr M
At last Tan Sri (Dr) Ani Arope,, the former executivechairman and chief executive of TNB who was unceremoniously given the boot after being blamed for a major blackout in the early 1990s has at last open his mouth and given his side of the story. He talked to StarBiz deputy news editor JAGDEV SINGH SIDHU in this exclusiveinterview.
It was a win-win and win-win again for the IPPs all along and now the consumers are left with a sick pocket to pay for this excessive electricity charges imposed by TNB but forced on by the IPPs.
This is the IPPs’ contribution, from their website “towards the national development and to work towards achieving the objectives of our Prime Minister’s vision”. The IPPs are course reluctant to renegotiate the pricing in their one-sided contracts (just like the NS highways concessionaires) and the Government can only bait them with again the win-win formula by extending their period of operation.
These are the so-called ‘captains’ of industry who gained their fortunes by political pull, by having government grant them favors and franchises at the expense of their fellow-men.
The Tun’s vision is indeed a “blurred Vision 2020” causing so much problems and hardship. No wonder he asked history to “forget me” in his exclusive interview with Malaysiakini. The following is a reproduction of the article Ani: TNB got a raw deal WHEN the Government decided to approve the request from Tenaga Nasional Bhd (TNB) to raise electricity tariffs, the plight of the national utility took centre-stage. Naturally, the knee-jerk reaction among consumers was not favourable. The 12% rise in tariffs appears to have re-ignited the debate on how good the going is for independent power producers (IPPs) at the cost of the national utility’s cashflow. The imbalance between the generation side of the business and that of transmission and distribution has put a strain on TNB. To understand the privatisation of the power generation sector, one needs to take a look back in history to understand that the country’s IPPs came about as a result of the Government’s effort to address the issue of stable power supply after the landmark 1992 blackout. Lending a historical perspective to the issue of IPPs is former TNB executive chairman Tan Sri Ani Arope, who headed the national utility from 1990 to 1996. It was during his tenure that the first generation IPPs were created. StarBiz deputy news editor JAGDEV SINGH SIDHU has the story.
STARBIZ: What happened after the first major blackout in 1992?
Ani: TNB had plans in place to pump out more energy by building plants in Pasir Gudang and Paka. Financing was no problem and our credit standing was very high. We had the land acquired and were ready to move in and plant up.
But we were told by the Economic Planning Unit (EPU) that it had its own plans. We cautioned EPU that if those plants, which would take two years to complete, were not built; Malaysia would get another major blackout. When you have a place with 250 engineers, it does not make sense to say (the blackout) is because of poor planning. But the EPU said it had its own plans and we were told to surrender the land.
Then it surfaced that it wanted to privatise the power plants. I am not anti-IPPs per se. It is good to have other players but it has to be done fairly. It has to be fair to the consumers, not just TNB, which is a conduit. TNB, because of the electricity hike, has been treated as the whipping boy. The focus should be on the consumers.
When the generous terms were given to the IPPs, all my other peers around the world asked what was happening. They said they would like to have a share in the IPPs. They said (the contracts to IPPs) were “too darn generous.” (The terms) were grossly one sided.
How was the Malaysian model of IPPs created?
Ask our previous Prime Minister.
How was the process of negotiations with IPPs conducted?
There was no negotiation. Absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the EPU. And we were harassed, humiliated and talked down every time we went there. After that, my team was disappointed. The EPU just gave us the terms and asked us to agree. I said no way I would.
What about the pricing and terms of the contracts?
It was all fixed up. (They said) this is the price, this is thecapacity charge and this is the number of years. They said you just take it and I refused to sign the contracts. And then, I was put out to pasture.
Why did you disagree with the terms?
It was grossly unfair. At 16 sen per unit (kWh) and with the take or pay situation, actually it was 23 sen per unit. With 23 sen, plus transmission and distribution costs, TNB would have had to charge the consumer no less than 30 sen per unit. If mixed with TNB’s cost, the cost would come down but that was at our expense because we were producing electricity at 8 sen a unit. We can deliver electricity at 17 sen per unit.
And then there is a capacity charge. Nobody produces excess electricity like Malaysia and it goes to waste because there are no batteries to store that power. TNB only needs a reserve of 15% to 20%.
TNB was producing electricity at 8 sen a unit. What should have been the right price for IPPs to sell to TNB?
Twelve sen. They could not beat our price as we had already amortised our assets. But for the new guys or even ourselves to come in then and (having) to meet interest charges and to make a small profit, it would cost 12 sen a unit.
This was what we told one IPP. The IPP agreed to it but the EPU said that unless the IPP raised its price, the contract would not be given to the IPP. So he got it for 14 sen per unit.
And then, there is the cost pass-through. If the price of fuel went up, the extra cost is passed through to us. And in other words, it is passed on to the consumer.
Under what terms would you have agreed to the IPPs being set up?
Have an independent buyer for the electricity and in one way, let TNB come in and bid for the plants. Get other people to come in. Get a commission to see (to) our needs and TNB can be one of the producers.
It is argued that the IPPs’ contracts are too lucrative but there are IPPs in other countries in Africa or Asia that have better terms.
There are IPPs charging 50 to 60 US cents per unit but they use diesel. Take our own situation and compare oranges with oranges. Then it is fair. Do whatever is fair.
How were you affected by the process of awarding the IPP contracts?
I felt sick. It was morally wrong and not fair. If it is legal andnot fair, I will not do it. If it is fair and illegal, I still won’t do it. It has to be legal and fair.
We work for the consumers, workers and shareholders. TNB is morally obligated to these three, but the consumers come first, otherwise we won’t be around. It is then the workers and the shareholders.
When I said that, they said “Dia ingat bapak dia-punya” (He thinks this is his father’s company). This job is an amanah (trust). You are entrusted with this responsibility and you carry it out to the best of your ability. I do not want somebody to come and urinate on my grave. In the Malay culture, that is about the worst insult they can do to a man.
Do you think you did the right thing by not signing the agreements?
Absolutely.
How should a contract with the IPPs work?
In Australia, they call the IPPs and ask “what is your price”. They will pay the IPP that offers the best price. What they could have done is to throw the net wider and ask everybody (if they) are good, it would be awarded to them. But in our case, the contracts were ready-made and we were asked to sign.
What is your view on the impending renegotiation with the IPPs?
It has to be legal and fair. If we were to negotiate unfairly and illegally, the whole world will be looking at us and they will say “Don’t sign anything with Malaysia because if things go against the country, the Government will void the agreement”.
We have to look at this very carefully.
But what we can do now is to say, can we bring down the capacity charge. Anything above the 15% reserve margin, we will call for bids.
The second thing is that the IPPs would have by now paid up their whole capital investments in their plants and it is all gravy (or profit) from now. Could we not bring this down a bit? Instead of paying a small amount to (a special fund), why not increase the (payment) for future planting up? In that manner, we can control the price of electricity. Otherwise, it’s going to escalate.
Who in your opinion should get involved in the negotiations?
The consumers should be there. For me, you should get a very independent body. Then, you can bring in TNB, the IPPs, the consumers and Energy Commission. But these bodies and consumers should not make a judgment.
from Malaysia Business News.Highlights are added in, for the original in black see original article
WHEN the Government decided to approve the request from Tenaga Nasional Bhd (TNB) to raise electricity tariffs, the plight of the national utility took centre-stage. Naturally, the knee-jerk reaction among consumers was not favourable. The 12% rise in tariffs appears to have re-ignited the debate on how good the going is for independent power producers (IPPs) at the cost of the national utility’s cashflow. The imbalance between the generation side of the business and that of transmission and distribution has put a strain on TNB. To understand the privatisation of the power generation sector, one needs to take a look back in history to understand that the country’s IPPs came about as a result of the Government’s effort to address the issue of stable power supply after the landmark 1992 blackout. Lending a historical perspective to the issue of IPPs is former TNB executive chairman Tan Sri Ani Arope, who headed the national utility from 1990 to 1996. It was during his tenure that the first generation IPPs were created. StarBiz deputy news editor JAGDEV SINGH SIDHU has the story.
STARBIZ: What happened after the first major blackout in 1992?
Ani: TNB had plans in place to pump out more energy by building plants in Pasir Gudang and Paka. Financing was no problem and our credit standing was very high. We had the land acquired and were ready to move in and plant up.
But we were told by the Economic Planning Unit (EPU) that it had its own plans. We cautioned EPU that if those plants, which would take two years to complete, were not built; Malaysia would get another major blackout. When you have a place with 250 engineers, it does not make sense to say (the blackout) is because of poor planning. But the EPU said it had its own plans and we were told to surrender the land.
Then it surfaced that it wanted to privatise the power plants. I am not anti-IPPs per se. It is good to have other players but it has to be done fairly. It has to be fair to the consumers, not just TNB, which is a conduit. TNB, because of the electricity hike, has been treated as the whipping boy. The focus should be on the consumers.
When the generous terms were given to the IPPs, all my other peers around the world asked what was happening. They said they would like to have a share in the IPPs. They said (the contracts to IPPs) were “too darn generous.” (The terms) were grossly one sided.
How was the Malaysian model of IPPs created?
Ask our previous Prime Minister.
How was the process of negotiations with IPPs conducted?
There was no negotiation. Absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the EPU. And we were harassed, humiliated and talked down every time we went there. After that, my team was disappointed. The EPU just gave us the terms and asked us to agree. I said no way I would.
What about the pricing and terms of the contracts?
It was all fixed up. (They said) this is the price, this is thecapacity charge and this is the number of years. They said you just take it and I refused to sign the contracts. And then, I was put out to pasture.
Why did you disagree with the terms?
It was grossly unfair. At 16 sen per unit (kWh) and with the take or pay situation, actually it was 23 sen per unit. With 23 sen, plus transmission and distribution costs, TNB would have had to charge the consumer no less than 30 sen per unit. If mixed with TNB’s cost, the cost would come down but that was at our expense because we were producing electricity at 8 sen a unit. We can deliver electricity at 17 sen per unit.
And then there is a capacity charge. Nobody produces excess electricity like Malaysia and it goes to waste because there are no batteries to store that power. TNB only needs a reserve of 15% to 20%.
TNB was producing electricity at 8 sen a unit. What should have been the right price for IPPs to sell to TNB?
Twelve sen. They could not beat our price as we had already amortised our assets. But for the new guys or even ourselves to come in then and (having) to meet interest charges and to make a small profit, it would cost 12 sen a unit.
This was what we told one IPP. The IPP agreed to it but the EPU said that unless the IPP raised its price, the contract would not be given to the IPP. So he got it for 14 sen per unit.
And then, there is the cost pass-through. If the price of fuel went up, the extra cost is passed through to us. And in other words, it is passed on to the consumer.
Under what terms would you have agreed to the IPPs being set up?
Have an independent buyer for the electricity and in one way, let TNB come in and bid for the plants. Get other people to come in. Get a commission to see (to) our needs and TNB can be one of the producers.
It is argued that the IPPs’ contracts are too lucrative but there are IPPs in other countries in Africa or Asia that have better terms.
There are IPPs charging 50 to 60 US cents per unit but they use diesel. Take our own situation and compare oranges with oranges. Then it is fair. Do whatever is fair.
How were you affected by the process of awarding the IPP contracts?
I felt sick. It was morally wrong and not fair. If it is legal andnot fair, I will not do it. If it is fair and illegal, I still won’t do it. It has to be legal and fair.
We work for the consumers, workers and shareholders. TNB is morally obligated to these three, but the consumers come first, otherwise we won’t be around. It is then the workers and the shareholders.
When I said that, they said “Dia ingat bapak dia-punya” (He thinks this is his father’s company). This job is an amanah (trust). You are entrusted with this responsibility and you carry it out to the best of your ability. I do not want somebody to come and urinate on my grave. In the Malay culture, that is about the worst insult they can do to a man.
Do you think you did the right thing by not signing the agreements?
Absolutely.
How should a contract with the IPPs work?
In Australia, they call the IPPs and ask “what is your price”. They will pay the IPP that offers the best price. What they could have done is to throw the net wider and ask everybody (if they) are good, it would be awarded to them. But in our case, the contracts were ready-made and we were asked to sign.
What is your view on the impending renegotiation with the IPPs?
It has to be legal and fair. If we were to negotiate unfairly and illegally, the whole world will be looking at us and they will say “Don’t sign anything with Malaysia because if things go against the country, the Government will void the agreement”.
We have to look at this very carefully.
But what we can do now is to say, can we bring down the capacity charge. Anything above the 15% reserve margin, we will call for bids.
The second thing is that the IPPs would have by now paid up their whole capital investments in their plants and it is all gravy (or profit) from now. Could we not bring this down a bit? Instead of paying a small amount to (a special fund), why not increase the (payment) for future planting up? In that manner, we can control the price of electricity. Otherwise, it’s going to escalate.
Who in your opinion should get involved in the negotiations?
The consumers should be there. For me, you should get a very independent body. Then, you can bring in TNB, the IPPs, the consumers and Energy Commission. But these bodies and consumers should not make a judgment.
