Economy

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2015 Budget shows that the Prime Minister has failed his promise to decrease unnecessary expenditure and to increase transparency in government spending

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 10th October, 2014

2015 Budget shows that the Prime Minister has failed his promise to decrease unnecessary expenditure and to increase transparency in government spending

Prime Minister Najib has announced that the 2015 budget will incur an estimated expenditure of RM273.94 billion, an increase of RM9.74 billion from the announced 2014 budget of RM264.2, at increase of 3.7%.

At the same time, the Economic Report 2014/2015 has estimated that the amount spent on subsidies will be reduced from RM40.6b to RM37.7b, a decrease of RM2.9b or 7.1%. This is a result of the continued subsidy rationalisation program and expected increase in the price of petrol and diesel.

While the people will be burdened with an increase in the cost of living due to the subsidy rationalisation program and the introduction of GST in 2015, it is clear from the 2015 Budget that the government has not tightened its own belt.

According to the Economic Report 2014/2015, the amount spent on supplies and services, which is where much of the wastage that is reported year in year out in the National Audit Report comes from, is expected to rise from RM36.4b to RM38.1b, an increase of RM1.7b or 4.6%.

This is in spite of the promise made by Prime Minister Najib that the public sector will undertake 11 cuts in expenditure.[1]

At the same time, the estimated expenditure in the Prime Minister’s Office is expected to increase by RM2.6 billion which is the largest absolute increase among all the Ministries, even more than the RM2.03 billion increase in the Ministry of Education’s allocation. (See Table 1 below)

This includes items in the development expenditure which lacks total transparency in terms of the purpose of expenditure. For example, under the title ‘Projek Khas’ or special projects, the development expenditure has increased from RM180m in 2014 to RM1.61 billion in 2015, an increase of RM1.43b or a 793.1% increase!

This kind of black box spending is exactly what the Anti-Corruption NKRA under the Government Transformation Program (GTP) was and is trying to reduce. Sadly, it seems that the Prime Minister has not taken the advice of the unit within his own Ministry.

The upcoming debate sessions will present an opportune time for Pakatan Rakyat Members of Parliament to question the spending and policies of put forth in the 2015 Budget and for us to present our alternative policies, some of which have been outlined in the Pakatan Rakyat Alternative Budget 2015.

Dr. Ong Kian Ming
Member of Parliament for Serdang

[1] http://www.thestar.com.my/News/Nation/2013/12/31/Costcutting-measures-start-tomorrow-Public-sector-will-see-11-steps-implemented-to-compensate-for-pr/

Why was 30MW of Geothermal FIT Quota allocated via direct negotiation to Tawau Green Energy (TGE) which is majority owned by Sabah UMNO leaders?

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 2nd of May, 2014

Why was 30MW of Geothermal FIT Quota allocated via direct negotiation to Tawau Green Energy (TGE) which is majority owned by Sabah UMNO leaders?

FiT Quotas in Malaysia are in high demand because of their limited number and the potential financial returns from renewal energy. The E-FIT system developed by the Sustainable Energy Development Authority (SEDA), using many millions of ringgit, is supposed to provide a more transparent platform to allocate FIT Quotas across the various categories including biogas, biomass, hydro and solar PV.

However, a recent decision by the Ministry of Energy, Green Technology and Water (KeTTHA), shows that the E-FIT system has been replaced by direct negotiation in the awarding of 30MW of geothermal energy to the Sabah based Tawau Green Energy (TGE).

Tawau Green Energy (TGE) which is in the process of building Malaysia’s first geothermal energy plant in the Apas Kiri area in the Tawau district announced that they had been awarded a FIT Quota by KeTTHA on the 8th of November, 2013.[1] This was confirmed by a reply on the 18th of November to my college, YB Chan Foong Hin, ADUN for Sri Tanjung, in the Sabah state assembly (Appendix 1). However, this was not announced in the SEDA website!

In a search with the Companies Commission in September 2013, it was revealed that the majority 52% shareholder of Tawau Green Energy was none other than Yamani Hafez bin Musa, who is the UMNO Sipitang division Youth Chief and also son of the Sabah Chief Minister, Musa Aman. In the latest search in May 2014, the major shareholder has now been changed to Awang Kading Tang, the former Sabah UMNO Youth chief and current deputy UMNO division chief for Sandakan. (Appendix 2)

I call upon the Minister, Maximus Ongkili, as well as the CEO of SEDA, Badriyah Haji Abdul Malek to answer the following questions:

  1. Has this 30MW Geothermal FIT Quota been awarded via direct negotiation to Tawau Green Energy?
  2. How could it have been awarded on the 8th of November 2013 when the gazetted to introduce Geothermal Energy as a category in the Schedule of the RE Act was only published on the 24th of December 2013?
  3. Did the Minister over-ride SEDA in deciding this FIT Quota allocation to Tawau Green Energy (TGE)?
  4. What is the FIT rate for geothermal energy for this FIT Quota?
  1. Will more direct negotiations be decided by the Minister for KeTTHA especially for the very much sought after solar PV quota above 425kwH?

In a briefing given by SEDA COO, Ir Dr Ali Askar, he stated that applications for solar PV quotas above 425kwH would have to be submitted manually and that these quotas would be decided by the Minister. If this is indeed the case, it would make a mockery of the E-FIT system that is only applicable to the small players below 425kwH and the larger quotas will be decided by the Minister at his discretion.

Appendix 1: Reply to YB Chan Foong Hin, ADUN for Sri Tanjong, on the 18th of November, 2013 in the Sabah DUN

Appendix 2: Major shareholders for Tawau Green Energy (TGE) from company searches in September 2013 and May 2014

Companies Commission Search from September 2013 showing Yamani Hafez bin Musa as the majority 52% shareholder of Tawau Green Energy


Companies Commission Search from May 2014 showing Awang Kadin Tang as the majority 52% shareholder of Tawau Green Energy


[1] http://www.tgepower.com/announcement.html

“Big Boys” can use the direct negotiation process for renewable energy while the small players have to fight for smaller quotas among themselves

Media Statement by Dr. Ong Kian Ming, MP for Serdang, on the 25 of April, 2014

“Big Boys” can use the direct negotiation process for renewable energy while the small players have to fight for smaller quotas among themselves

In a briefing given by Ir Dr Ali Askhar Sher Mohamad, COO of the Sustainable Energy Development Authority (SEDA) on the 11th of April 2014 regarding changes to the FiT application process, it was revealed that the online submission process will no longer be used for Solar PV quotas which are more than 425 kW and that this will be replaced by a manual application.[1] This proposed changed was due to instructions from the Ministry of Energy, Green Technology and Water (KeTTHA) and the exact details of the application process is still being reviewed by the Ministry.

While there may be some legitimate reasons for the applications to be submitted and reviewed manually – such as to check for compliance and to review the technical aspects of the application – the fact that SEDA and KeTTHA have not finalized the bidding and application process raises many concerns.

Will this lead to, for example, the Ministry having power to decide which companies to award the FiT quota to for large solar projects? Will this also lead to the possibility of directly negotiated projects between a project owner and the Ministry?

Table 1: New FiT Quotas from 2014 to 2017

In the same briefing given by the COO of SEDA, 30MW of quota for Geothermal Power is supposed to be awarded for the year 2016 (See Table 1 above). Is it mere coincidence that Tawau Green Energy (TGE) Sdn Bhd, the first geothermal power plant in Malaysia, is expected to be add 30MW to Sabah’s grid by the 2nd quarter of 2016?[2]

It was reported in March 2014[3] that:

“Last November, TGE signed a Renewable Energy Power Purchase Agreement (REPPA) for 21 sen per kilowatt hour with Sabah Electricity Sdn Bhd (SESB) to supply 30 MW to SESB’s grid from the geothermal power plant. They hope to migrate to the FiT with SEDA Malaysia approval.”

Does this mean that SEDA had already decided to award this 30MW FiT quota to Tawau Green Energy (TGE) through a direct negotiation and not via an open tender? Are the terms of this contract more lucrative than the 21 sen per kWh contract signed with the Sabah Electricity Sdn Bhd (SESB)?

In addition, 15MW of the FIT quota will be allocated to biomass (solid waste) in 2017. Is it also mere coincidence that 2017 is the expected commissioning date of the Waste to Energy (WTE) plant in Taman Beringin, Kepong? Does this mean that KeTTHA and SEDA already knows the technology which will be selected for the Waste to Energy plant in Kepong and that it will involve the direct burning of waste? (For example, if an anaerobic digestion system is proposed, it will use up the biogas rather than the biomass FiT quota)

Why is it that those who are bidding for smaller projects such as Solar PV FIT quotas for individuals must submit their applications online, obtain a queue number and then go through an open balloting process while the “big boys” are not forced to go through a similar process that is as open and transparent?

This development comes on the heels of the decision to award 1MDB a 50MW solar farm project in Kedah via a direct negotiation.[4] While this project is not funded by the FIT quota, one must take note of the fact that 50MW is more than the combined allocation for Solar PV for individuals, non-individuals and community projects for 2014 which only comes up to 40MW for 2014!

I call upon the Minister of Energy, Green Technology and Water to adhere to principles of openness and transparency for all the players and stakeholders in the renewable energy sector rather than giving priority and access to only the “big boys”.

Dr. Ong Kian Ming
Member of Parliament for Serdang


[1] http://seda.gov.my/?omaneg=00010100000001010101000100001000000000000000000000&s=27

[2] http://www.thestar.com.my/News/Nation/2014/04/07/Malaysias-first-geothermal-plant-set-to-boost-green-energy/

[3] http://www.greenprospectsasia.com/content/malaysia%E2%80%99s-first-geothermal-plant-takes

[4] http://www.thestar.com.my/Business/Business-News/2014/04/23/1MDB-and-US-firm-in-solar-tieup-Both-parties-will-jointly-invest-in-countrys-largest-50MW-solar-farm/