Wednesday 25 May 2011

Chin's 'savings, not subsidy' remark shocks DAP

DAP has expressed shock at Energy, Green Technology and Water Minister Peter Chin Fah Kui's insistence that the RM19 billion savings enjoyed by independent power producers (IPPs) and Tenaga Nasional Berhad annually is not a subsidy.

Penang Chief Minister Lim Guan Eng has described this as another form of BN's “self-delusion and mass deception”.

NONELim (left) said this was similar to BN's previous insistence that RM540 million given to Perimekar Sdn Bhd was not a commission for arranging the purchase of two Scorpene submarines worth US$972 million (RM3.68 billion) for the Royal Malaysian Navy.

He added that it is ridiculous for Perimekar to be given a contract to provide support services and coordination for six years despite having no previous track record or experience in handling submarines.

“If the RM19 billion profits forgone by Petronas annually to assist the IPPs and TNB is not a form of subsidy then what is the correct term to describe this loss?” Lim queried in a statement.

“Power generated by IPPs meets about 60 percent of the country's electricity requirement while TNB the remaining 40 percent, indicating that it is IPPs that benefit most from this RM19 billon,” he added.

Yesterday Chin had denied that IPPs enjoyed gas subsidies amounting to RM19 billion annually from the government.

He said the RM19 billion was the profit that Petroliam Nasional Bhd had to forgo for having to sell gas below the market price to the IPPs and TNB; that the RM10.70 per MMBtu price tag was fixed by the government to keep electricity tariffs low.

He was responding to the DAP's criticisms that the government should first remove “big opium” gas subsidies worth RM19 billion for IPPs and commercial power sectors before dealing with the opiate for the masses such as sugar, diesel and petrol subsidies.

peter chinIn response to Chin's (right) clarification, Lim said today if Petronas can sell gas at market rates, then RM19 billion annually can be used to benefit directly 27 million Malaysians, instead of a few big companies.

He added that the real question that Chin and BN should answer is why the tariffs for gas sold to IPPs cannot be increased when the prices of sugar, diesel and petrol sold to the ordinary Malaysians can be increased following the reduction of subsidies.

“Chin can deceive himself that the RM19 billion of profits forgone by Petronas is not a form of subsidy to IPPs and TNB, but he will not succeed in deceiving and deluding the people into believing that the rich IPPs are not spared from the pain of paying higher prices,” said Lim.

“Any failure by BN to insist that the IPPs must pay gas tariffs at market prices and stop price rises beginning in June 2011, will only show that ordinary people are targeted by BN to bear the full burden of price rises,” he added.

Gross injustice

On a related matter, Lim stressed that increasing prices paid by ordinary Malaysians but not increasing prices paid by rich companies is a “gross injustice”.

This RM19 billion annually in savings has enabled the IPPs to record billions of ringgit in profit, Lim claimed.

“Instead of addressing this injustice by ensuring that prices are increased first for big companies instead of ordinary Malaysians, BN challenges Pakatan Rakyat state governments to subsidise ordinary Malaysians instead,” he said.

“This is irresponsible as Pakatan would definitely do so if it has the same resources as BN has with control over Petronas and TNB,” he added.

“In fact, in the state governments controlled by Pakatan, more social benefits and assistance have been given to the people as compared to those given by the previous BN government,” he claimed.

Lim related for instance how the Penang Pakatan government had spent millions in wiping out extreme poverty in the state.

The state, he added, had also spent RM20 million to award RM100 to senior citizens, single mothers and the disabled's appreciation programmes.

He stressed that RM12 million yearly assistance had been given to Chinese and Tamil schools and Sekolah Agama Rakyat.

“All this was not given by the previous BN state government,” Lim quipped.

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