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YB Rafizi Ramli is out-of-line to call for Malaysian funds to boycott the proposed listing of Edra Energy on Bursa Malaysia and also linking Edra Energy to 1MDB.

Through Edra Energy, 1MDB had fulfilled its goal to help reform the Independent Power Plant (IPP) industry which the opposition previously said had many lop-sided agreements in favour of the concession companies. Ironically those lop-sides agreements cited by the opposition were signed during the reign of a former Prime Minister who is now with the opposition and a colleague of YB Rafizi.

To recap, after 1MDB had entered the IPP business, the government then called for the first ever open tender on Power Purchase Agreements (PPA) in September 2012.

1MDB consistently put in the lowest bid for every new or renewal PPA thus helping to push down the PPA price for all other bidders.

As a result of this, many of the PPAs that were previously alleged to be lop-sided are now made fairer to the extent that a major investment bank had proclaimed in their analyst report that sweet-heart deals for the IPPs is now history.

For YB Rafizi’s information, savings arising from the fairer PPA rates to Tenaga Nasional Berhad and Petronas gas subsidies – and by extension, to our government – is estimated to be as much as RM200 billion over the next 20 years period.

The results of this are very visible today. Instead of registering losses and requiring government assistance as in the past, fairer IPP rates and terms – which used to make up 40% of its cost – have contributed to Tenaga Nasional now consistently reporting record profits.

While Petronas’ gas subsidies bill for 2015 is 1/3 less of what it was in the year 2012 – a savings of RM10 billion.

These huge savings are now spent back on projects and welfare that benefits the people while still keeping electricity prices low for everyone.

This is also the reason why since 2013, the opposition is no longer talking about lop-sided IPP deals as the current government has solved this long-standing legacy problem of the past through 1MDB.

Subsequent to this, Edra Energy was sold by 1MDB to a foreign investor via an international open tender. Today, 1MDB is no longer have any business links with Edra Energy.

YB Rafizi should admit that the government and 1MDB had played a role in helping to solve this legacy problem of lop-sided IPP rates.

I urge YB Rafizi to retract his call for such a senseless boycott that only undermines foreign investor confidence in Malaysia or may cause Edra and other companies to abandon listing on Bursa Malaysia in favour of stock exchanges in other countries.

This dangerous and callous action can be construed as economic sabotage.

YB Rafizi should leave it to the professional managers of our local funds to decide whether investing in Edra makes business sense to them or if it is in-line with their investment strategies.

Datuk Seri Abdul Rahman Dahlan,
Minister in the Prime Minister’s Department
Economic Planning Unit

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