Azmin alleges govt overpaid Genting, Ananda in IPP buy

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KUALA LUMPUR (Oct 3): Member of Parliament for Gombak Azmin Ali alleged today (Wednesday) that the state investment arm 1Malaysia Development Bhd (1MDB) had overpaid Genting and billionaire T Ananda Krishnan when buying over their power plants.

The deputy president of Parti Keadilan Rakyat (PKR) attacked the price tag paid by 1MDB for these power generating assets as "sky high" when he was in Parliament debating on the Budget 2013.

He said these first generation independent power plants (IPPs) should cost less as the Purchasing Power Agreement (PPA) between them and Tenaga Nasional Bhd (TNB) will lapse by 2016.

He said the RM2.3 billion paid by 1MDB to acquire Genting Sanyen was at a whopping six times the average book value of IPPs in the region, while the RM8.5 billion for Tanjong Energy was a "generous price" paid to its shareholder Ananda.

"The investment cost to Tanjong Energy 15 years ago to build and operate the power plants was at RM8.9 billion. I am sure that after 15 years, the power plant will have been depreciated in value.

"Why then was 1MDB still paying such as high price for Tanjong Energy?" he said.

The fact that the PPA for both Tanjong Energy and Genting Sanyen is about to lapse in several years should make it a non-viable investment for 1MDB, he argued.

Touching on another subject involving 1MDB, Azmin alleged that 1DMB will be awarded the license to build and operate a power plant in Butterworth, even though there is an open tender.

He said even though the process to select the winning bid is still on-going, there has been government directive given to officials involved in the selection process to adjust the terms and conditions of the tender according to 1MDB's suggestions.

"The information that I have gathered from several people in the government is that 1MDB will be awarded with another power generating license in Butterworth. I would like to ask the government whether this information that I have received is true?" said Azmin.

A news portal had said Sept 28 that the Electricity Commission (EC) will announce the winner for the construction and operation license of a Combined Cycle Gas Turbine (CCGT) in Prai this month.