TNB is at it again ....
Now and then, the chief of TNB, raises the question on increasing electricity tariffs. As always it's the increase on the cost of fuel. But this time, added to the increase in the price of crude oil there is a new element of cost which is now the cost of coal. The CEO of TNB says that TNB can no longer absorb the price of the coal that has gone up from its operating budget cost of USD 85/= per tonne to USD 110/= per tonne.
I remember at one time when the price of crude oil kept on increasing, to the extent the price of crude reached a maximum of USD 150/= per barrel, TNB got approval from the government to an increase in electricity tariffs. And when, the price of crude oil went down and stabilise to around USD 70-80 per barrel, TNB was strangely silent and never bothered to reduce the tariffs.
Now it's happening again when crude oil is hovering between USD 85-90 per barrel, the CEO of TNB starts pestering the government and the rakyat for sympathy on the fact that TNB cannot sustain absorbing the additional cost for long, adding that to the cost of diesel fuel there is the cost of coal that has exceeded its budget operating cost, while at the same time the CEO boasted that TNB has increased revenues to more than RM 30 billion and profits by more than 20%. He talks about billions of ringgits in profits just for a quarter of a year alone !
TNB is a government monopoly that has a penchant for price increase in tariffs whenever the prices of their sources of fuels - be it diesel, coal or gas - increase. It never reduces tariffs when the prices of their fuels for their generators decrease, sometimes even substantially. All it wants is more revenue, more profits, more this and more that (which must be more than previous years) without even thinking of the Malaysian populace.
I hear that TNB has acquired 70% of the mine in Kalimantan from which the coal produced is being used as fuel for their coal fired generators, as for example, the ones in Kapar - which means that TNB has control over the price of coal that it uses. I also hear that the coal is of such high quality that it's shipped to the generators without undergoing further processing - straight from the ground to the end user. Which ultimately means that TNB makes profits both ways - by increasing the price of fuel and getting increases in the electricity tariffs. How cunning !
Update 02/04/2011: Now, hear this :
It confirms what I claim before about TNB's coal mine purchase in Kalimantan. In an article, Why Integrax, Tenaga Nasional ? in the Star today, one P. Gunasegaram, states that TNB purchased a coal mine in Kalimantan, Indonesia for RM 220 million in 2001, rationalising that it was a strategic move to secure TNB's source of supply. The Star writer continues that in 2007, TNB got out of the mining investment for USD 20 million, thus incurring a capital loss of 70% of the original investments. Why it got out of coal mining was never satisfactorily elucidated by Gunasegaram beyond saying that TNB, being one of the the owners, was willy nilly forced to purchase coal from its company at a high price. Funny, even if I own a grocery store, I am not forced to buy goods from my store at a high price. I still have the option to buy from any other store if its goods are cheaper. According to the writer, the TNB CEO then, one Datuk Seri Che Khalid Mohamad Noh swore that TNB would not make the same mistake again and instead TNB would stick to its core business - which was to produce and distribute electricity. Then, why the bloody fuck is TNB now acquiring 22 % stake (RM 106 millions) in a public-listed holding company called Integrax, with subsidiaries involved in coal handling services, port and marine operations - services or activities that have nothing to do with the production and distribution of electricity.
posted by Richard Sorge @ 8:51 PM
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