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Tuesday, October 14, 2014

Putrajaya bailing out 1MDB by boosting IPO value, says DAP lawmaker

DAP national publicity secretary Tony Pua said the ‘rapid succession’ tenders of multi-billion ringgit power contracts given to 1MDB’s energy arm was proof that the government was ‘pulling out all stops’ to ensure the viability of the IPO. – The Malaysian Insider file pic, October 14, 2014.DAP national publicity secretary Tony Pua said the ‘rapid succession’ tenders of multi-billion ringgit power contracts given to 1MDB’s energy arm was proof that the government was ‘pulling out all stops’ to ensure the viability of the IPO. – The Malaysian Insider file pic, October 14, 2014.
Putrajaya is bailing out 1Malaysia Development Bhd (1MDB) through several power plant projects worth billions of ringgit, DAP national publicity secretary Tony Pua said today.
Pua, the Petaling Jaya Utara MP, questioned the latest power project awarded to 1MDB – a 2,000MW gas-turbine power plant in Malacca given via direct negotiation.
He said although the government had rescued 1MDB in a written reply to his parliamentary question on a power project awarded to 1MDB, circumstances as to how the tenders were awarded suggested otherwise.
He said the "rapid succession" tenders of multi-billion ringgit power contracts given to 1MDB’s energy arm was proof that the government was "pulling out all stops" to ensure the viability of the IPO.
“This is especially since the company already had to postpone its IPO twice due to unattractive valuations now set for the first quarter of 2015,” Pua said in a statement today.
Pua called Prime Minister Datuk Seri Najib Razak's administration "so desperate" that it had to hasten the award of the latest contract in Malacca, despite the fact that the gas-turbine power plant was only scheduled for commissioning in seven years' time, in 2021.
"The Najib administration is so wanton that they have eschewed any further pretence with 'open tenders', and have proceeded to award new lucrative contracts directly," Pua said.
He questioned the haste, noting that key terms such as electricity tariffs had not been set for this contract.
"This is worse than a directly-negotiated contract because there's no negotiations at all!" Pua said.
Earlier in April, Tenaga Nasional Bhd (TNB) signed another power purchase pact with 1MDB on the construction a solar power plant.
1MDB will design, construct, own, operate and maintain a 50MW solar photovoltaic energy facility in Kedah and supply electricity to TNB.
All the private tenders to supply energy benefited 1MDB to the rakyat's loss, Pua said, and such "bias" towards the sovereign fund would crowd out the private sector and deter foreign direct investment in Malaysia.
"Ultimately, the losers will be ordinary Malaysians who have to foot higher electricity tariffs as a result of higher tariffs awarded to 1MDB, as well as a drastically reduced competitive environment in the power producer markets," he said.
- TMI

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