PUTRAJAYA – Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan today urged PKR vice-president Rafizi Ramli to retract his call for Malaysian funds to boycott the proposed listing of Edra Energy on Bursa Malaysia.
He said the senseless boycott call could undermine foreign investor confidence in Malaysia and lead to Edra and other companies to abandon listing on Bursa Malaysia in favour of stock exchanges in other countries.
“This dangerous and callous action can be construed as economic sabotage,” he said in a statement, here today.
Abdul Rahman said the Pandan Member of Parliament should leave it to the professional managers of Malaysian local funds to decide whether investing in Edra made business sense to them or if it was in-line with their investment strategies.
Rafizi in a statement yesterday had called on Malaysian institutional investors responsible for public funds to boycott the initial public offering (IPO) by Edra Energy, linking the company with 1Malaysia Development Berhad (1MDB).
Abdul Rahman said through Edra Energy, 1MDB had fulfilled its goal to help reform the Independent Power Plant (IPP) industry which the opposition previously said had many lop-sided agreements in favour of the concession companies.
Ironically, he said, those lop-sides agreements cited by the opposition were signed during the reign of a former Prime Minister who is now with the opposition and a colleague of Rafizi.
To recap, Abdul Rahman said after 1MDB had entered the IPP business, the government then called for the first ever open tender on Power Purchase Agreements (PPA) in September 2012.
“1MDB consistently put in the lowest bid for every new or renewal PPA thus helping to push down the PPA price for all other bidders,” he said.
As a result of this, he said many of the PPAs that were previously alleged to be lop-sided were now made fairer to the extent that a major investment bank had proclaimed in their analyst report that sweet-heart deals for the IPPs were now history.
Abdul Rahman said savings arising from the fairer PPA rates to Tenaga Nasional Bhd (TNB) and Petronas gas subsidies – and by extension, to the government – was estimated would be as much as RM200 billion over the next 20 years.
“The results of this are very visible today. Instead of registering losses and requiring government assistance as in the past, fairer IPP rates and terms, which used to make up 40% of its cost, have contributed to TNB now consistently reporting record profits.
“While Petronas’ gas subsidies bill for 2015 is 1/3 less of what it was in the year 2012, a savings of RM10 billion,” he said.
Explaining further, Abdul Rahman said these huge savings were now spent back on projects and welfare that benefits the people while still keeping electricity prices low for everyone.
“This is also the reason why since 2013, the opposition is no longer talking about lop-sided IPP deals as the current government has solved this long-standing legacy problem of the past through 1MDB,” he said.
Abdul Rahman said Edra Energy was sold by 1MDB to a foreign investor via an international open tender and no longer had any business links with Edra Energy. – BERNAMA