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Dr Lim Keng Yaik Has Failed As A Minister By Failing To Fulfill His Promise To Make Tenaga Pay Compensation To The Public For The 3 Hour Blackout Affecting 5 States On 13 January 2005 And Not Daring To Oppose Tenaga’s Request For A Tariff Hike.  

Press Statement

by Lim Guan Eng  

(Petaling Jaya, Wednesday): Energy, Water and Communications Minister Datuk Seri Lim Keng Yaik has failed as a Minister by failing to fulfill his promise to make Tenaga Nasional Bhd pay compensation to the public for losses caused by the 3-hour blackout on 13 January 2005 and not daring to oppose Tenaga’s latest request for a tariff hike.

DAP is surprised why his challenger for the Gerakan Presidency, Datuk Kerk Choo Ting, had not questioned Keng Yaik’s failure to carry out his promises made to the affected 1 million consumers carried out on the front page of Chinese newspapers on 14 January 2005. If Keng Yaik keeps on breaking his promises, he is not reliable, trustworthy and a responsible Minister.


In the past Keng Yaik had often lambasted Tenaga for demanding a tariff hike saying that it depended on the company’s efficiency and the price of oil. Keng Yaik even said that a petrol price increase is not a ground, and most of the fuels like gas have fixed prices and are subsidized. However, Keng Yaik has strangely remained silent when the Chairman of Tenaga, Tan Sri Leo Moggie publicly asked for a tariff hike three days ago.


It is true the average price paid by Tenaga for coal jumped 46 per cent in the three months to May 31 this year, to US$49.80 (RM189) per tonne, over the same period a year earlier. However, most of Malaysia’s power plants run on natural gas. Since May 1997, Petronas has supplied processed gas to Tenaga and the independent power producers (IPPs) at a regulated price of RM6.40 per mmbtu (British thermal unit) as compared to the current market price of more than RM 30/-.


Petronas has subsidised the power sector to the tune of RM25 billion, of which RM14 billion or 55% went to the IPPs, whilst the remaining RM 11 billion is enjoyed by Petronas. For Tenaga to seek a tariff hike when it has enjoyed direct subsidies of RM 11 billion since 1997 is unacceptable, ungrateful, irresponsible and not in the national interest.


As the IPPs are private companies enjoying special rates for generating electrical power that Tenaga is forced to purchase, there is no reason for IPPs to enjoy such huge subsidies of RM 14 billion to profit at Tenaga and Malaysian consumers’ expense. Instead of asking consumers to pay more, Tenaga should ask the government to review these unfair compulsory power purchase agreements contracted at higher than market rates.


With this RM25 billion subsidy given out to Petronas and IPPs, the people have lost out on:

o       510,000 units of low-cost houses costing RM50,000 each,

o       50 universities at RM 500 million each,

o       6,250 Chinese and national schools at RM4 million each,

o       free healthcare for  three years, and

o       denied a free Proton Savvy given out to 625,000 Malaysians.  


Why should Malaysians pay higher tariffs when we have sacrificed and lost so much when Tenaga and the IPPs have made huge profits? DAP strongly opposes electricity tariff increase by Tenaga Nasional Bhd as unfair when Tenaga recorded a 70% rise in profits in the third quarter ending 31 May 2005 from RM 336.6 million to RM 572.8 million.

So far Tenaga has earned RM 876.4 million for the 9-month period compared with only RM 367.3 million a year earlier. Tenaga is expected to report a full-year net profit of RM 1.47 billion in 2005 ending 31 August as compared to RM 814 million the previous year. It is only fair that Malaysians as the principal shareholders of Tenaga enjoys the profits by not paying higher tariffs and demand greater efforts to cut its higher operating costs with greater efficiency and professional management.



* Lim Guan Eng, DAP Secretary-General

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