Guan Eng: RM13b bloated spending shows IPPs protected

By Clara Chooi
The Malaysian Insider
Jun 15, 2011

Lim: The only losers are 27 million ordinary consumers who are not IPPs.

KUALA LUMPUR, June 15 — The Najib administration’s attempt to increase its 2011 budget by RM13 billion is proof of its failure to control spending even after slashing subsidies on daily essentials, DAP’s Lim Guan Eng said today.

The Penang Chief Minister blamed Barisan Nasional’s (BN) “bad governance” for the increasing cost of living in Malaysia, adding that the public was now experiencing “the worst of both worlds”.

“By reducing subsidies, there are inflationary pressure causing prices to rise and hurting the poor. And yet, cuts do not improve efficiency and competitiveness nor cut down budget expenditure as the IPPs (independent power producers) are still allowed to enjoy gas subsidies.

“The only losers are 27 million ordinary consumers who are not IPPs,” he said in a statement today.

Putrajaya tabled a RM13,186,713,000 supplementary supply bill in Parliament yesterday, seeking additional spending in the first half of this year. The amount is an 8 per cent addition to Budget 2011’s RM162,805,323,000, which was tabled last year.

Of the RM13 billion, the biggest amount is for the Treasury (RM6 billion). A total of RM1.5 billion goes to the Education Ministry while RM1 billion is for the Health Ministry.

Lim continued the expound on the opposition’s call on the the federal government to review its agreements with IPPs, which are said to enjoy annual subsidies of up to RM19 billion.

Despite widespread criticism, the government recently slashed subsidies for sugar and diesel for nine categories of commercial vehicles and increased electricity tariffs.

“The people are paying the penalty for BN’s failure to control spending when drastic subsidy cuts of sugar, electricity, natural gas and diesel have not brought about any improvements in our budget deficit,” Lim complained.

He added that the continued failure to cut IPP subsidies has only succeeded in increasing the public’s growing disenchantment with the Najib administration, which is said poised to face a general election very soon.

Petronas, said Lim, was forced to extend about RM131.3 billion in gas subsidies up to the end of 2010 and this only benefitted the IPPs.

The IPPs, he added, also benefit from a guaranteed buyer through its compulsory Power Purchase Agreement (PPA) signed by TNB.

“Normally TNB would not be raising electricity tariffs with such huge subsidies. But the RM5.4 billion subsidies enjoyed by TNB were offset as they are forced to purchase power they do not need at high prices that only profits IPPs,” Lim explained.

As a result, he said, Malaysia’s power reserve margin is the highest in the world at 52.6 per cent.

“Perhaps BN needs a strong reminder whether it is the IPPs or ordinary Malaysians that determine the direction and destiny of the country,” he said.

  1. #1 by monsterball on Wednesday, 15 June 2011 - 8:29 pm

    Why can’t the Govt respond and prove LGE wrong.
    For decades LKS have been exposing corruptions and wrote lots of booklets on each case.
    Also no respond from Govt.
    If every case is proven that these two …..father and son are liars and trouble makers…..UMNO B sure to govern forever.
    Why Mahathir and now Najib dare not respond but apply ISA to shut mouths?
    See what happen?
    People’s Power vote for DAP and LGE to show who they trust most.

  2. #2 by waterfrontcoolie on Wednesday, 15 June 2011 - 10:20 pm

    Lookig at the current scenario, I would think it is highly dangerous for PSD scholars to be sent to the US to study the Art of Governance; essentially because the only art they will come back with is the ART of Minting; just like the US Treasury. This degree Iam sure those BN scholars will be able to learn the fastest and earn the highest award at 4.0. All these excesses should be written in Bahasa so that the rural poors will learn the truth. i must admit, the Gomen has fine-tuned the Art of creating CASH Opportunity to perfection. In the case of brain-drain, they created Talent Corp, to ensure a new crop of highly paid civil servant being created. They trot the globe like the medicine men organizing talks with no results. If the nation hasn’t got the infrastructure and the culture to cultivate the first world society, how would we pay them at a comparable earning that they are receiving at the moment? You can’t simply pay someone $50 k a month just to compete with our neighbour! he/she has to output that kind of value that is demanded in the market! Here we seek to give employment to all sundries, no matter what they are capable of. Of course, a little later the dependency syndrome takes over, then it becomes ‘the world owes me a living!’. And this is what we are preaching and encouraging today. So the Hutanf syndrome like that of USA will be easily absorbed and then we can proclaim, we are second only to USA!

  3. #3 by sheriff singh on Wednesday, 15 June 2011 - 10:56 pm

    Bankrupt by 2012. BN is dangerous.

  4. #4 by yhsiew on Thursday, 16 June 2011 - 12:01 am

    While the public is now experiencing “the worst of both worlds”, Umno cronies are benefited from double gains – money from subsidy cuts + bloated budget.

  5. #5 by dagen on Thursday, 16 June 2011 - 9:05 am

    /// “The only losers are 27 million ordinary consumers who are not IPPs,” ///

    “Siapa ni 27 million ordinary consumers? Mereka ni siapa? Di sini kita cuma ada beberapa ribu penduduk je. Semuanya dlm umno. Nah diam, moo, keris, …..”

    Jib expressing his surprise over the sudden presence of 23million consumers in the country. To the best of his knowledge Malaysia never has more then 10,000 or so umnoputra citizens.

  6. #6 by Winston on Thursday, 16 June 2011 - 1:47 pm

    LGE, let BN be stupid.
    Let the people be disenchanted with them.
    And dump them in the next GE.
    It makes the job of the opposition so much easier.

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