Highlight: Ongkili: No special treatment for 1MDB-linked IPPs

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KUALA LUMPUR (July 17): Government-owned 1Malaysia Development Bhd (1MDB) is not spared from having to bid for power purchase agreements (PPAs), the Dewan Rakyat was told today. Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said 1MDB's takeover of two independent power producers (IPPs) - Genting Sanyen Power and Tanjong Energy's Powertek - does not affect the period of extension of their IPPs. He was responding to Dr Lee Boon Chey's (PKR-Gopeng) who had pointed out that the two IPPs' contracts end in 2016 but after the takeover, Genting Sanyen Power was given an extension. "What is the criteria needed in prolonging the PPA because after 1MDB's costly takeover and involvement it looks like there is something to make sure that the extension granted to the IPP is to ensure that 1MDB continues to profit?" asked Lee. However, Ongkili said regardless of the takeover, all IPPs have to go through a transparent competitive bidding process. The minister said that companies were given an extension based on "strong reasons". The companies would be examined by three expert panels which oversee the technical, financial and legal aspects of the PPA, he said. "Only after it is decided by the panels, it is brought to the purview of the ministry," he said. "The deal between the IPPs and 1MDB is a business strategy and it doesn't involve the ministry," he added. Ongkili also provided additional information in a written reply stating that competitive bidding began in 2011. He said there are currently 14 IPPs whose contracts expire between 2015 and 2033. Among them, YTL Power International Bhd's contract expires in September 2015, Segari Energy Venture's in June 2017, Genting Sanyen Power's in February 2016 and Powertek Bhd's in January 2016. "When their PPAs are nearing the expiry date they are invited to take part in the tender process given that they adhere to the requirements listed," said Ongkili.