Friday 29 Mar 2024
By
main news image

KUALA LUMPUR: YTL Power International Bhd is likely to withdraw from participating in the controversial RM3 billion power plant project in Johor called Project 4A, said sources, amid mounting criticism on the way the contract was awarded by the Energy Commission (EC) through direct negotiation instead of competitive bidding.

Its withdrawal is expected to pave the way for an open tender.

This follows a news report yesterday quoting Tenaga Nasional Bhd (TNB) chief executive officer Datuk Seri Azman Mohd as saying that it was still evaluating the conditional award for Project 4A even as its unions sent out a memorandum to voice their opposition to the national utility company collaborating with YTL Power.

It has until July 25 to decide whether or not to participate in a consortium to develop Project 4A, which involves a 1,000MW to 1,400MW combined cycle gas turbine power plant in Pasir Gudang, Johor.

On May 31, a consortium consisting of YTL Power, TNB and SIPP Energy Sdn Bhd, which is linked to the Johor royalty, was declared the winner of the proposed Project 4A by the EC.

Some industry executives had criticised the government’s decision to award project 4A without any tender being called. They suggested that this was to compensate the YTL-SIPP consortium, which only two months ago lost out to 1 Malaysia Development Bhd (1MDB) for the 3B power project despite submitting a cheaper bid.

According to The Malaysian Insider (TMI) yesterday, YTL Power’s board of directors had convened an emergency meeting to discuss its participation in the proposed project, after learning that TNB was not committed to the project.

Quoting sources, TMI reported that YTL Power was exploring a range of options over the award, and that its potential withdrawal would restore credibility to the bidding process.

Recently, YTL Corp Bhd managing director Tan Sri Francis Yeoh came under fire after he said Malaysia needed to do away with “crony capitalism” and should go through due process at a Global Malaysia Series forum organised by the Performance Management & Delivery Unit.

Yeoh had also tried to distance himself from the perception that he had benefitted from former prime minister Tun Dr Mahathir Mohamad’s backing in the independent power producer sector.

After Umno-owned newspapers and Mahathir himself attacked Yeoh over his remarks in the media, he apologised, saying his comments had been misrepresented.

The Project 4A award has received heavy criticism, with critics saying it went against the government’s push for transparency for all government projects. However, the EC justified its award by saying that the engineering, procurement and construction portion of the power plant still had to undergo a competitive bidding process.

The Edge Financial Daily had previously reported that there was a need to fast-track the construction of a combined cycle gas power plant to be operational in 2018, rather than 2020 as originally planned, due to recent power disruptions across Peninsular Malaysia which affected six states.

YTL Power’s stock closed 0.05 sen or 3.27% lower yesterday at RM1.48, bringing its market capitalisation to RM10.05 billion.


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

      Print
      Text Size
      Share