Media statement by Lim Guan Eng in Kuala Lumpur on Wednesday, 8^th June 2011: 

Would the IPPs still enjoy huge profits without gas subsidies of RM131.3 billion and compulsory power purchase agreements with Tenaga Nasional Bhd? 

DAP express disgust at BN and UMNO leaders who said that deep sea fishermen should be grateful that they are still paying RM1.80 per litre of diesel and no longer enjoy the super subsidy of RM1.25 per litre which they previously enjoyed. BN is so arrogant that they have forgotten the important question why should the rakyat be grateful for diesel subsidies enjoyed by everyone and must happily accept subsidy cuts when these subsidy cuts are not imposed on the rich such as Independent Power Producers(IPPs)?

MCA Deputy Agriculture and Agro-based Industry Minister Chua Tee Yong said the Government would save RM226.8mil annually removal of the super subsidy on deep sea fishermen and the nine types of commercial vehicles on 1 June. This has caused lorry operators to increase transport costs by up to 30%.

Subsidy cuts should be applied equally so that it is fair. The reason why Malaysians are so unhappy at the subsidy cuts is that ordinary Malaysians bear the brunt of the subsidy cuts that are not borne by cronies of BN.

There is no logic or reason why the BN government should be so concerned about annual savings of RM226.8 million from reduction of diesel subsidies or RM116 million from reduction of sugar subsidies but not gas subsidies of RM26 billion this year in gas subsidy to both the power and non-power sectors.

This is a classic case of penny wise pound foolish.

Up to end 2010, Petronas has extended about RM131.3 billion in gas subsidy to both the power and non-power sectors, where the main beneficiaries are the IPPs. Amongst the IPPs, YTL Power’s profit for 2010 was more than RM1.6 billion on revenues of RM13 billion. Malakoff in 2009 had a profit of RM380 million on revenues of RM5.6 billion. Powertek had revenues of RM1.34 billion and a profit of RM450 million.

Would the IPPs still enjoy these huge profits without gas subsidies of RM131.3 billion and compulsory power purchase agreements with Tenaga Nasional Bhd?

*Lim Guan Eng, DAP Secretary General & MP for Bagan