Friday 20 November 2015

About being fair on the Edra Energy issue

Someone has accused me of being bias in my previous posts on the Edra Energy issue,

TNB's sembahyang hajat, I think better give Edra to them

TNB staring at unequal competition

He then forwarded me a Bernama report which supports the selling of the Edra Energy equities to foreign companies.

Since he demanded for me to be fair, and I always believe in being fair, I'm publishing the report in full here,

Foreign Control More Good Than Harm, Say Analysts

KUALA LUMPUR, Nov 19 (Bernama) -- Foreign control of utility companies can be good for the industry as well as serve the national interest, say energy analysts and observers.

They noted recent concerns raised by some quarters on the speculated sale of power assets to foreign investors and felt such concerns did not consider the reality of the industry.

A researcher told Bernama, "The energy business is never as free as the operators may want it to be due to strong control mechanism, licensing and multiple regulatory bodies, including the Ministry of Energy, Green Technology and Water and Energy Commission."

For instance, he said, tariffs for the existing Independent Power Producers (IPPs) are fixed under the long-term Power Purchase Agreement (PPA) for the life of the PPA, and any revision to these tariffs will require the consent of EC and Tenaga Nasional Bhd (TNB).

He pointed out that there is also the primary fuel supply for the power plants which must be sourced from government-linked or controlled entities.

Currently, TNB controls coal supply and Petronas supplies gas.

"Gone are the years when a particular IPP could dictate 'take or pay' on TNB. Today TNB, which has total control of the National Grid, calls the shots. TNB will buy what it needs and not whatever IPPs produce," he said.

He stressed that TNB has full control over IPPs, foreign or local, because under the PPA, TNB could step in to take over the operations of a plant in the event of contract breaches.

Asked if foreign companies could use lower cost structure (from economies of scale) to undermine local operators, he said they must first have a huge market share in terms of capacity and fuel usage.

In the case of Edra Global Energy Bhd, which is now up for sale, its effective share of installed generating capacity in Peninsular Malaysia is only 14.6 per cent, significantly behind market giants TNB (50 per cent) and Malakoff Corporation Bhd (25 per cent).

For fuel share in Peninsular Malaysia, Edra utilises around 17 per cent for total gas-fired capacity and approximately 15 per cent effective share of total coal-fired capacity. And it has no hydro plants.

"With such a marginal share, Edra poses little threat on all fronts, especially in view of TNB's dominant and unique market position across all three segments of fuel supply, generation and transmission, its robust financial strength (total assets of more than RM110 billion) and familiarity with the local IPP industry," he said.

He also allayed fears that Malaysians would lose their jobs, saying there is no evidence to suggest that foreign companies would bring in foreign workers to replace Malaysians.

The Malaysia Investment Report by the Malaysian Investment Development Authority (MIDA) states Malaysia had approved investments of up to RM235.9 billion in 2014 which could potentially create about 178,360 job opportunities.

Foreign investments formed 27.4 per cent of the total investments (RM64.6 billion).

It is notable that many countries, including Singapore, Australia, Indonesia and the United Kingdom (UK), permit 100 per cent foreign ownership of power generation plants.

Hong Leong Investment Bank Research's energy analyst Daniel Wong was reported to conclude that even if the assets were sold to foreign companies, TNB would still remain a defensive stock and its role in the transmission of the nation's electricity would not be jeopardised.

Economist Professor Dr Hoo Ke Ping recently said giving the country's energy sector to foreign countries would open the sector to shielded growth.

"Giving the IPPs to foreign control means that we are allowing foreign investment into the country. Without foreign investment, it is not easy for the country to achieve growth," he said.

Stressing that the world is globalising and opening up, Hoo said the country had also been opening up to the global market ever since the government agreed to the Asean Free Trade Area (AFTA) in 1992.


I wish though that the Bernama report could had named the first analyst whom it quoted extensively.

That would have made the report more credible.

Nonetheless, it's up to you all to decide on the merits of arguments put forth by those analysts in favour of foreign control over our country's energy sector.

Personally, I prefer this earlier report which features arguments by both sides,

Economists debate over Edra Energy acquisition


  1. You are so gullible and weak in deriving to an opinion. So narrow your understanding and too sentimental!!!!

  2. How I wished Najib had not coined the existence of 1MDB in the first place. Malaysians today would not be at loggerhead, arguing whether or not foreigners should own IPP.

    Who is this 'someone' that accused Annie of being bias?
    Who knows, he might also be the one who could lose 'something' if TNB gets the deal. 1MDB could get more 'cash' if sold to foreigner.
    Hope this 'someone' is no the same kind of middleman, like Razak Baginda & Jho Low, negotiating on behalf of the gomen.


  3. How about being loyal(?) in principle adinda Ms Annie
    to 1MDB so that it in-sya-Allah succeeds for the government, opposition and the rakyats sake.

    Commercial viability:
    Why take political positions on commercial transactions to sell its energy assets to foreigners, at the same time warning LUTH and local companies not to buy TRX land? Worse is one top opposition leaders suggestion for 1MDB to be liquidated(?) and take full losses when foreign lenders are not asking for it and interests being paid.

    If there was mismanagement just sack the Board and chage the government come GE-14, but any sabotaging actions on our our Sovereign wealth fund company is traitorous.

    Haji M Zin
    Alor Gajah DPH

    1. Hi Zin, what's it you're saying: "How about being loyal(?) IN PRINCIPLE adinda Ms Annie to 1MDB so that it INSYA ALLAH succeeds for the government, opposition and the rakyats sake."

      Zin, before you blow your loyalist trumpet could you go find out what PRINCIPLES mean and what is God's role in man's (CROOKED) affairs?

    2. Gomen berniaga? main monoploy?


    3. We can agree or disagree on the principles, Sdr ANON 18:46
      but there was no specific reference to Gods principles, ada?

      Haji M Zin
      Alor Gajah DPH

    4. Saudara Zin,
      You used the heavy words INSYA ALLAH, which means "BY THE WILL OF ALLAH"
      You make reference to Allah's Will - and how do you know it's Allah's Will for us to be loyal to the CROOKED Ah Jib Gor and Jho Low and their Cronies?


    5. In-sya-Allah success yes for 1MDB, Sdr 07:31
      for the country vs did not mention any personalities, ada?

      Haji M Zin
      Alor Gajah DPH

    6. Saudara Haji Zin.

      Nak success macam mana, nak bayar bunga-hutang saja pun dah RM2 Billion setahun. Nak langsai hutang RM42 Billion ++ kena jual, (bukan gadai) harta pusaka yang telah dijanjikan untuk pembangunan bumiputera.

      Jual semua energy asset pun tak dapat langsaikan semua hutang.

      Contoh dari Din Turtle: Abang Sulong diamanahkan sebidang tanah pusaka. Yang mana lebih baik:-
      1. Dia jual tanah pada bangsa asing, duit itu, bayar hutang.
      2. Dia jual tanah, duit itu dibagi samarata kepada adik-beradik.


    7. You didn't go to PWTC(?) Sdr ANON 10:50
      to attend the 1MDB briefing session on 14th November 2015
      to ask the CEO how they will achieve the projected +ve RM10 million excess from the sale of assets.

      I'm skeptical about the whole thing and even the PM is
      but done's done and we just wait next year and wish the best in-sya-Allah for our sovereign wealth fund company.

      Haji M Zin
      Alor Gajah DPH

  4. From 1MDB they then mess up everything in the end the people will have to live with the burden ,a corrupt leader will corrupt everything.


    1. Pandei olang cekap itu ,'anjing kalau sutak biasa makan itu tahi ,mesti mau makan juga ' maa aa .

    2. not only a leader but what about supporters protecting like a cancer.ali baba n 40 THIEVES

    3. They all want to rule the world by their own designs ....

    4. kami rakyat diam diam? kami rakyat ada people's power