Malaysia Today - Your Source of Independent News
Malaysia Today - Your Source of Independent News |
| Lynas: where common sense left us Posted: 30 May 2011 12:53 PM PDT Why is a foreign country sending all the raw material over here to process and then take back what it wants, leaving behind what it does not want back on its shores? So much has been said about the Lynas project. The anti-Lynas voice is slowly drowning under the pro-Lynas marching on. To give credence to the pro-Lynas propagators and champions, even threats have been hurled at concerned citizens and residents. People have been admonished in no uncertain terms that they may even lose everything else if they boycotted the Lynas project. So many highly intelligent and so-called specialists are also seemingly working hard in the wake of anti-Lynas objections. The goal is to allay the fears, give assurances that all safety measures will be guaranteed and to allow the progression of the Lynas project that was already hatched a long time ago without public consultation. But what happened to common sense? Does anyone want to ask that simple question: Why is a foreign country sending all the raw material over here to process and then take back what it wants, leaving behind what it does not want back on its shores? Whether you are putting in all the safety measures or whether you will see to the ultimate safe disposal of residual toxins, etc is not the issue. Why do it here? - that is the fundamental question that has not been answered. Yet we are so busy debating and arguing with all kinds of scientific and attested benchmarks to keep the Lynas project on. We are refusing to pay homoge to basic common sense. And therein lies the rape of a young nation. If only our leaders put citizens first before profits; if only we put health and well being before economic harvests - we may be poor by Adam Smith's standards, but healthy on all accounts. We are just kidding ourselves. What we are looking for is big money in quick time. Sad but true. And in the final analysis, who cares if the pawns die owing to exposure to contaminants ten, twenty or thirty years from now. By experience we know, the powers that be will in all likelihood cry when the Lynas project goes fowl in the distant future: "We did all we can; but the tragedy is beyond us - it is an act of God. So let us accept the unexpected tragedy in a manner that is consistent with our respective faiths". And that is because if have chosen to let common sense fly out of the window. We forget that without common sense there is no Vision 2020 in the first place. |
| Two Wrongs Don't Make One Right Posted: 30 May 2011 12:47 PM PDT By Tony Pua The Najib administration announced that it will raise electricity prices by an average 7.12 per cent from June 1 this year. According to Reuters, the price charged by Petronas for the sale of natural gas to electricity companies would rise to RM13.70 per mmBtu from RM10.70, and increase by RM3.00 every month. The industrial and commercial consumers will bear the brunt of the tariff hike with an average increase of 8.35 per cent in their power bills. This will inevitably fuel further inflation and reduce the competitiveness of our goods and services. The Government has employed the excuse of the need to reduce subsidy bills as the basis for the tariff hike in order to reduce the "misallocation of resources", which leads to declining competitiveness. However the Government has at the same time conveniently ignored the fact that the source of the "misallocation of resources" lies with the unbelievably lucrative Independent Power Producers (IPPs) power purchasing agreements (PPAs) with Tenaga Nasional Bhd (TNB). As a comparison, the power industry structure in Malaysia and Thailand are highly similar, with a little more than 70% of the fuel-mix for electricity generation being natural gas. However despite the fact that natural gas prices are more than double that of Malaysia's at RM23.10 mmBtu, commercial electricity tariff in Thailand is only 0.4% higher at RM38.01 kWh, compared to Malaysia's 37.85 mmBtu.. In fact after the latest revision, it has become stark clear that electricity rates for our commercial sector will be significant higher than that in Thailand, despite the fact that natural gas prices for the sector in Malaysia will still be 68.6% cheaper. Using Thailand as a benchmark, Malaysian electricity prices should be 16.9% cheaper based on existing subsidy rates. Instead, the BN Government does the exact opposite to raise the electricity tariffs. This shows clearly that our problem with electricity industry "distortions" as described by Minister in Prime Minister's office, Nor Mohd Yakcop is not with its prices, but with our highly "ineffcient" power producing sector which charges high prices despite lower cost of production. And the key reason for that is the unfair PPAs which results in ridiculously high levels of electricity reserve margins. According to TNB, our reserve margin is 54.6% in 2008 and 52.6% in 2010, which is double that of Thailand and Java, Indonesia, at 25.4% and 26% respectively. The net effect is TNB is forced to purchase electricity which it does not need to the IPPs, resulting in inflated costs for TNB and correspondingly inflated profits for the IPPs. The Government's decision to reduce the subsidies to the electricity sector is a clear attempt to right an existing "wrong" with another "wrong", which will only lead to further distortions in our market, and not reduce it. Our export industries which are already affected by the strong ringgit will be dealt with a bigger blow due to higher electricity prices compared to the region as a result of an inefficient and distorted power sector which profits only the IPPs. The only and proper way to correct the distortions in our power sector is to restructure the lobsided PPAs. In fact by doing so, the Government can kill two birds with one stone, reducing its subsidies and correcting the inefficiencies in the power sector as a result of our super-high reserve margins, while at the same time maintaining our existing electricity rates. The fact that the Government chooses to punish our consumers and industries, without laying a finger on the IPPs only serves to prove that the Najib administration has no political will to carry out the necessary reforms to our economy, contrary to the rhetoric we hear every day.
TONY PUA is DAP National Publicity Secretary and MP for Petaling Jaya Utara |
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