KUALA LUMPUR: The Association of Water and Energy Research Malaysia (Awer) has called on Putrajaya to call for fresh bidding for the RM11 billion Jimah East Coast Power Plant, which was awarded to sovereign wealth fund, 1Malaysia Development Bhd (1MDB), in a controversial open tender.

This came after 1MDB applied for a six-month extension for the completion of the two-unit 2,000mw coal power plant recently (first unit was scheduled to be completed on Nov 15, 2018; second unit on May 15, 2019), which Awer terms as a mark of “sheer incompetency”.

“What went wrong? Once a project is awarded, the winner of the bid has responsibility to deliver the project on time,” said Awer president S Piarapakaran in a statement yesterday.

It said that Jimah East is still in its early stages and hence the government should cancel the award to 1MDB and call for a new competitive bidding — not for a coal-powered plant but a combined-cycle gas-turbine (CCGT) one because it is faster to complete.

A coal power plant takes around four years to build, while a CCGT power plant takes only 32 to 36 months, he said.

“A new open bidding... will prevent electricity supply security breaches in 2018 and 2019. If the bid is called next January, there is sufficient time to complete the 2,000mw CCGT project in time,” he said.

Alternatively, he said Putrajaya can make 1MDB bear all additional fuel cost and capacity charges that will be incurred, due to the delays in the construction of the plant should the extension be granted.

If not, Putrajaya should make the Cabinet and the top officials of the Ministry of Energy, Green Technology and Water (KeTTHA) and the Energy Commission (EC) pay for the additional costs that would be incurred due to the delay of Jimah East, he said.

The government has imposed a penalty cap of RM108 million for every 1000mw for the delay in the construction of the plants, but Awer had said there will be additional cost due to the delay, which it fears will be translated into a tariff hike that will directly impact consumers.

“[So] the additional cost that will be incurred after deducting the penalty should be paid by cabinet members, minister and senior officials of KeTTHA, as well as the chairman, commissioners and senior officials of the EC. Do not pass any additional cost to members of the public and businesses via electricity tariff,” he said.

Malakoff Corp Bhd’s 1,000mw Tanjung Bin coal-power plant, which was scheduled to be completed by March 2016, is also seeking six to 12 months’ extension.

Piarapakaran said the additional fuel cost that will be translated into a tariff for a six-month delay is about RM321.97 million, and around RM643.94 million for a one-year delay.

This article first appeared in The Edge Financial Daily, on December 18, 2014.