TNB said to clinch Prai project

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KUALA LUMPUR:  The Energy Commission (EC) will announce the winners of the 1,000MW to 1,400MW Prai Combined Cycle Gas Turbine (CCGT) power plant project today.
Tenaga Nasional Bhd (TNB) is said to have won the project; an executive close to the power utility group confirmed the news ahead of the EC’s announcement today.
Last month The Edge Financial Daily reported that eight power players submitted their bids for the Prai CCGT power plant project.
Earlier in July, The Edge Financial Daily reported that TNB and a consortium comprising Pendekar Power Sdn Bhd and Mitsui & Co Ltd had put in the lowest bids for the Prai CCGT power plant.
Pendekar Power comes under the umbrella of Powertek Bhd, whose parent Tanjong Energy Holdings Sdn Bhd was recently bought over by 1Malaysia Development Bhd (1MDB). 1MDB had also bought over Genting Sanyen Power Sdn Bhd just months after the purchase of Powertek.
Other consortia bidding for the Prai CCGT power plant are CI Holdings Bhd, Teknologi Tenaga Perlis Consortium Sdn Bhd and Daelim Industrial Co Ltd; Malakoff Corp Bhd, Petronas Power Sdn Bhd and Mitsubishi Corp; and YTL Power International Bhd and Marubeni Corp.
The individual companies in the running are Amcorp Power Sdn Bhd, Genting’s wholly-owned unit Mastika Lagenda Sdn Bhd, Sime Darby Power Sdn Bhd and TNB.
Once completed, the Prai CCGT power plant could surpass 60% efficiency in combined cycle mode, said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui at the Fourth Energy Forum last month.
The EC will also announce the winners of the power purchase agreement (PPA) extension today.
Meanwhile, Genting Sanyen and Segari Energy Ventures Sdn Bhd are expected to be the winners of the selective bidding exercise among first generation independent power producers (IPPs).
“Based on the transaction price by 1MDB (for Genting Sanyen), which was done at 14 times price-to-earnings, and the fact that the PPA (power purchase agreement)expires in four years’ time, it suggests that they are confident that their bid for the extension was quite competitive.
“This leaves another 1,300mw (in capacity), which will likely go to Malakoff’s Segari as it is the only combined cycle plant of such size. If they win this, it’d be good investment story for Malakoff’s IPO,” said an analyst.
The PPA extension, which will be for another five or 10 years from 2016/2017, is subjected to the new rates that TNB and IPPs have offered to the government versus the current tariff stipulated in the existing PPAs.

This article first appeared in The Edge Financial Daily, on Oct 9, 2012