Takeover the IPPs, not renegotiate


CAP is concerned that the government is already renegotiating with independent power producers (IPPs) whose contracts will be expiring soon.

Why are contract negotiations being carried out with IPPs  which have been a drain on the resources of Tenaga Nasional Berhad (TNB) and a burden to the consumers? Why not let TNB take over the IPPs?

This is not a radical suggestion considering that in 1982 the National Electricity Board (the predecessor of TNB) took over the Perak River Hydro Electric Power company  (PRHEP) and its subsidiary Kinta Electrical Distribution Co Ltd.  PRHEP which built the hydro-electric station and dam at Chenderoh, was at one time the largest power supplier in Malaya

In 1976, National Electricity Board had also replaced the Penang Municipality in supplying electricity to areas serviced by Huttenbach Ltd, a private power company which had earlier been taken over by the Penang Municipality.

TNB, with decades of experience in energy production has the capacity to produce energy more efficiently and at a lower cost than the IPPs. Moreover, profits coming to TNB, a government-controlled company, will benefit the people and the nation rather than private companies.

Letter to the Editor, 3  June  2011