On 28th February, the Energy Commission (EC) confirmed weeks of alleged “baseless speculation” that 1MDB will be awarded the new Independent Power Producer (IPP) 2,000MW coal-fired power plant concession. The project is said to be worth RM11 billion.
In the statement by the Energy Commission (EC), it said that “the selection of the preferred bidder of Project 3B is based on the criteria of full compliance with all the bid requirements as stipulated in the request for proposal (RFP) document and the lowest levelised tariff offered”. The EC also announced that the power plant would involve a levelised tariff of 25.33 sen/kWh.
As highlighted in my previous statements, YTL Power has submitted a qualified and cheaper competing bid at a levelised tariff of 25.23 sen/kWh to supply electricity to TNB. The Edge Malaysia has also reported that the levelised tariff by 1MDB was 25.65 sen/kWh.
Worse, the EC’s own technical evaluation committee had recommended YTL Power as the preferred bidder to the Board, based on documents sighted by The Edge, before the decision was overturned in favour of the more expensive 1MDB.
When we demanded for transparency and explanation over the evaluation, calculation and selection criteria by the EC and the Ministry of Energy, Green Technology and Water, all we received was stone-walled silence. The Government hence cannot blame the rakyat for thinking that this is a clear-cut desperate attempt to prop up 1MDB, which is labouring under a mountain of debt estimated in excess of RM30 billion.
However, this is not the first time where high-profile multi-billion ringgit projects are awarded not to the lowest qualified bidder by Dato’ Seri Najib Razak’s Government.
In August 2012, the Najib administration awarded a RM1.18 billion Ampang LRT Extension Project to George Kent Bhd. Exposes by Pakatan Rakyat had proven that that George Kent won the bid despite being priced RM167 million higher than the originally recommended bid the project owner Syarikat Prasarana Negara. Worse, George Kent was awarded the contract despite failing the technical criteria which has caused the company to be initially rejected by the professional evaluation consultants.
However, what gave away the manipulation at the highest level was the fact that George Kent won the bid over other establish rail players such as Siemens, Balfour Beatty, Bombardier, Posco and Colas despite having zero experience in rail projects. The company’s expertise is in the manufacture and supply “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “fibre glass reinforced polyester (FRP) panel tanks for bulk water storage”.
Today, the LRT project is delayed by at least 12 months and it is likely to result in additional costs for Syarikat Prasarana Negara.
The Prime Minister’s “open tender” system is clearly designed for show, for if the preferred bidder doesn’t put in the best price, the evaluation system will be manipulated to ensure the company will win against other qualified bidders.
Dato’ Seri Najib Razak has not only set aside the interest of the rakyat, who would have to bear higher costs – in these cases for electricity and for public transport – he has also decided to bury his own “New Economic Model” launched with great fanfare at the start of his premiership. He had declared that “we can no longer tolerate practices that support the behavior of rent-seeking and patronage…” when he launched his landmark New Economic Model (NEM) to replace the New Economic Policy (NEP) on 30 March 2010.
We are completely aghast at how Datuk Seri Najib Razak can continue to talk about the “New Economic Model” and “Economic Transformation” when Barisan Nasional cronies continue to win lucrative government tenders via rent-seeking and patronage, and not because of competency, quality and price competitiveness.
It has become clear that Dato’ Seri Najib Razak has abandoned the “New Economic Model”. Instead what we are witnessing a “transformation” into his “Kangkung” Economic Model, leading to vicious cycle of price hikes and higher costs of living for Malaysians.