Tag Archives: Dr M

1MDB AND IPP

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1MDB AND IPP

In order to justify 1MDB’s huge debt,the IPPs have become the convenient whipping boy for the 1MDB supporters to stir up public sentiment for the past few weeks.

IPPs have been portrayed as the leeches to the government’s coffer. And to deal with it, we need 1MDB and multi-billion debt.

Is that true?

Basically, it is due to the lack of transparency in the first generation of IPPs back in the 1990s when the ‘take or pay’ deal enjoyed by the IPPs seems unfair to the Government.

We must understand that when Malaysia experienced a national power crisis, it requires a quick and expensive solution which can only be made possible by private sector venture.

Because it involved multi-billion capital and the risks it undertook were thought to be incredibly high, the deal ‘take or pay’ was included.

It is strange to see at some of the  these IPPs which are now seen as “locusts”, were the “white knights” which had come to aid the Government to plant-up quickly, using private sector funding.

If not for the IPPs, the peninsula might have experienced more severe and persistent power outages in the 1990s and the 2000s as TNB did not deliver value and quality electricity to consumers.

Actually the ‘take or pay’ deal was only given to YTL Power. And YTL’s license will expire in this year hence there will be no more ‘take or pay’ deal to any IPP’s in Malaysia.

Why were the IPPs given subsidies when the people were not?

Actually the cheaper gas from Petronas for the IPPs and TNB is meant to benefit the people in the form of low tariff rates.

It is not like the IPPs or TNB can sell and trade the subsidised gas for their own profit.

In fact if there is no subsidy given to them, the people will have to pay the market price for electricity.

It means that all the ‘billions lost causef by IPPs’ that the 1MDB supporters keep harping about is actually went to the public.

Some may say all the IPP licenses were given to the cronies of one former Prime Minister. Hence, the IPPs are bad.

But cronies or not, the frequency and minutes of interruptions would have driven away many investors if the IPP solution was not initiated in 1990.

The involvement of IPPs in the power generation business had introduced efficiency besides contributing significantly towards stabilising the nation’s reserve margin.

Not only that, thousands of job have been created and today we proudly see some of the IPPs have ventured into the international market to do business in energy sector.

But the most important thing is, IPPs have brought competition to TNB in an industry that TNB had long monopolised.

Today, while TNB is the sole electricity distributor in this country, it is not the only electricity producer.

Given of all these contributions (and that is real), 1MDB supporters have to stop maligning the IPP as if they are the raison d’etre of 1MDB’s debt.

Please consider this:

The average returns for the first-generation IPPs were 17.8 per cent, while the second- and third-generation boasted average returns of 14.4 per cent and 11.7 per cent, respectively.

The fourth-generation IPPs is expected to reduce the average returns to 9.1 per cent.

Question number one:The first, second and third generation of IPPs enjoyed a much smaller return even before the inception of 1MDB.

If that’s possible to reduce IPPs’ earning without having to incur billions of debt through a strategic development company, why do you need 1MDB?

Question number two: Just for the record, Petronas already has to forgo revenues amounting up to RM12 Billion annually because of the discounted gas price given to TNB and IPPs.

The imported gas has to be subsidised at about RM40 per mmbtu instead of the market rate of RM145 per mmbtu.

It means Petronas can only sell the gas at one-third of the cost.

Can we say now, Petronas is the real saviour in reducing our electricity tariff, not 1MDB?

MatRodi

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Matrodi views on Chedet

During the event of launching Dr M's memori: Doctor In The House

During the event of Dr M’s memoir: Doctor In The House

Try going abroad and introduce yourself as a Malaysian. The immediate response one would get is ‘Malaysia boleh. Mahathir. Bagusss.’

This is our Tun Dr Mahathir- known simply as Dr M. From a poor African nation to a wealthy Arabian country, he commands a great respect. Such huge respect he had that Shah Rukh Khan- arguably one of the biggest superstar in the world- had flown directly from London with his private jet just to celebrate our beloved former prime minister’s birthday.

It is an open secret that many of the developing countries cherish the idea of having Dr M as their leader. Locally, the recent poll suggested Dr M is the right man for the Prime Minister job. It is due to a simple fact that this man has turned Malaysia from an agriculture country to the 17th largest trading nation in the world by the time he retired.

As a trained physician, he has generally been brisk, modern, quick to diagnose and even readier to prescribe. Because of these traits, Malaysia followed what Dr Mahathir calls the “Sinatra Principle” – they did it his way in dealing with East Asia Financial Crisis of 1997. Unlike Thailand, South Korea, Indonesia and the Philippines, Malaysia did not seek financial assistance from the International Monetary Fund.

Dr M is never afraid to stamp his authorities. He is like Sir Alex Ferguson in politics; he believes for whatever decisions he has to made, unpopular or not, it is for the good of the country.

In the same week in September 1998 that he fired his popular deputy, Dr M thumbed his nose at the global economy by instituting restrictive exchange controls on the Malaysian currency. He put the world on notice that unfettered capitalism may not be for every country.

Dr M was called an idiot, an ignoramus and a pariah. Undeterred, Dr M wrote to the Time Magazine. The article ‘Call Me a Heretic’- I must say- is the sheer act of bravery to take on western savants and pundits who were almost unanimous in denouncing his measures.  And 10 years later when the world plunged into financial crisis, Dr M has the last laugh.

Whether Malaysians realised or not, the nearest Malaysian to be conferred with Noble prize is Dr M- for his vociferous defense of discrimination against the Muslim in Bosnia. (Although I personally think the nomination for Noble prize in economy will be more apt.)

Few noticed Dr M as the evergreen writer. The writer in him continues to shine whether writing his own speech, an article or for his hugely popular blog. He is among a few politicians (or Prime Minister, maybe?) to make his stand known by writing his own thought. This is what makes Dr M different from his predecessors, contemporaries and nemesis. How many times our opposition leader pens his thought rather than simply reposting someone else’ opinion on his personal blog? The fact is very telling- Dr M is an intellectual without pretending to be one.

Those who loathe him especially the intellectual (or rather pseudo-intellectual), to undermine him is the easiest way up. Maybe to demonise the Grand Old Man will make them smarter. How dandy is that thinking.

If the detractors can’t argue with Dr M’s facts and figures, they will resort to question his origin. Ironically, these are the very same people who have self-styled themselves as meritocracy advocates and also the analysts that kept saying that race and colour are not important. Such racist people can be when desperate.

Last 31st Oct 2013 commemorates the 10th anniversary of Dr M’s retirement as the Prime Minister of Malaysia. After 10 years, we miss Malaysia under Dr M’s leadership. But instead of remembering the good old days, we should have move forward.

Recently, I went to Japan under the Look East Policy initiative. Never been to the land of rising sun, I was amazed how Japan can be so successful and developed country without having natural resources. How could that be? Later, I came to realize that the greatest resource that Japan ever had is the Japanese themselves. Since the near-total destruction of World War 2, Japanese have rebuilt their country through the hard work, passion and pride.

Dr M- the longtime admirer of the Japanese culture always wanted Malaysian to emulate Japanese’s work hard culture. When he introduced Look East Policy thirty years ago, he believes this one single character contributes the most to the success of individuals, society or nation. They are not laid back.

The success of the country is very much depended on the people; their values, their work ethics and their discipline when doing whatever they have to do. This is the essence of the Look East Policy.

Fast forward today, the country is facing big political and economic challenges. Now more than ever our government needs us. We can’t hope to have another Dr M to make our Vision 2020 to be realized. To make this happen, it’s going to be up to us- the people.

We should remember the government is a system of which the public is also a part. The Executives, you, me and all Malaysians. If the system is lacking in certain things, then to rectify the weaknesses is our responsibility as well. Remember, God only help those who help themselves.

Even though the doctor is still in the house, (to quote Mr Shamsul Akmar’s article), Malaysians are responsible to keep the house in order.

MatRodi

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