Wednesday 25 July 2012

Updated 6:15pm : Grilled by MP, another broken Seda rule is exposed

By Kuek Ser Kuang Keng, Malaysiakini report

The Sustainable Energy Development Authority (Seda) has been found to have broken its own regulation as stated in the online application form for the Feed-in Tariff (FiT) scheme.

This was revealed after Seda officers were grilled by DAP's Petaling Jaya Utara MP Tony Pua during the question-and-answer session at a public briefing on the FiT scheme by Seda this morning.
NONEThe breach of the regulation may have caused unfairness to applicants who had complied with the online application rules, Pua (right in photo) said.

He raised the issue when questioning the financial capability of the companies owned by Suzi Suliana, the daughter of the former chief secretary to the government Mohd Sidek Hassan, and her associates.
The 12 firms were given 32.4 percent or 45.9MW out of the quota set for solar energy under the FiT scheme

Pua pointed out that the application form clearly states that the FiT applicant's bank account statement must show a credit balance of at least 20 percent of the total capital cost of the renewable energy installation.

Therefore, he wanted to know whether Suzi's companies had the sufficient credit balance, which could amount to RM70 million for the installation of the 45.9MW solar plants.
NONEHowever, the top Seda management, including chairperson Fong Chan Onn, chief executive officer Badriyah Abd Malek and chief operating officer Ali Askar Sher Mohamad (right), said the 20 percent capital may not necessarily be in the form of hard cash.

It could be in the form of capital held by the applicant's holding company, by joint-venture partners or even land owned by the applicant, Ali Askar said, and all of Suzi's companies had met this requirement.
Pua then pointed out that Seda had gone against its own application regulations.

“Wouldn't you think so, given that your requirement is very specifically placed in your application form and guidelines?

“Isn’t it very unfair for genuine companies that actually boarded 20 percent of the capital requirement in order to apply, when certain companies that did not put in the money were able to secure?

“We are not talking about joint-venture partners, we are not talking about the holding company, but (the capital) in the applicant's account.

“Is that not a ground for the lawyer to say this application (which does not have sufficient balance in its bank account) can be disqualified?” Pua asked.

“No, I don't think so,” replied Badriyah.

'I know where you are coming from' 

Badriyah repeated that securing the quota was just the beginning, for this did not guarantee the licence for the applicant to be a renewable energy producer as the applicant still needed to meet certain milestones to construct the solar power plant.

“I know where you are coming from. You are a politician. I know where you are coming from,” she added.

NONEEventually, Badriyah said that Seda took note of Pua's view and would revisit the application regulations.

Pua also warned Seda that failure to comply with its own application procedures would result in the quotas of many incompetent companies to be revoked in the future.

This was because the 20 percent capital requirement was designed to ensure that all successful applicants would have the financial ability to fund the energy plants.

Pua then zoomed his query on Suzi's companies, asking whether they had the 20 percent capital requirement in their bank accounts at the time of application.

The Seda management refused to disclose this information, citing confidentiality and that doing so would affect the image of the companies concerned.

Badriyah said Pua could meet her, confidentially, to learn about the status of Suzi's companies, but Pua rejected the offer.

“If you can tell me, then you can tell the public. I don't have any special privileges,” he replied.

NONEBadriyah (right in picture) then consulted the Seda legal adviser Toh Bemg Suan (on the left) and replied that the information Pua sought was classified under the Renewable Energy Act 2011.

Pua's continuing pressure on the issue even won him a round of applause from the 50-odd people attending the briefing, most of whom were renewable energy industry players.

Earlier, he asked why the quotas for most of Suzi's companies had still not been revoked, even though the companies failed to increase their initial paid-up capital of RM100 to RM200,000, or two percent of the project cost, which is a requirement upon securing their quota.

Badriyah and Ali replied that Seda was aware of the situation.

They said six companies with around 20MW of quotas have had their quotas revoked so far and the process of revocation for other companies was ongoing and that information and progress on these companies would be kept “only between Seda and the companies”.

Information on companies that were either given or had their quotas revoked would eventually be published in the Seda annual report, Badriyah and Ali explained.

The quotas revoked would be reopened for public application in the fourth quarter of 2012.

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