Kota Marudu Member of Parliament

Ongkili says no fine imposed on concession holders of Project 3B, Project 4A for delay

KUALA LUMPUR: There is no fine imposed on the concession holders of Project 3B, Tenaga Nasional Bhd-Mitsui, and Project 4A, SIPP Energy Sdn Bhd, for the delay of the power plant projects, says Datuk Seri Panglima Dr Maximus Ongkili.

"No fine is imposed on concession holders of Project 3B and Project 4A.

"However, the guaranteed bond that amounted to RM30 million for Project 3B has been returned to the concession holder 1MDB and Mitsui Co, Ltd and was replaced by new guaranteed bond by Tenaga Nasional Bhd (TNB) and Mitsui Co, Ltd," Energy, Green Technology and Water minister Ongkili said in a written reply to DAP Serdang MP Ong Kian Ming.

Ong had asked the minister about the amount of fine imposed on the concession holders of Project 3B and Project 4A following the delay of the two projects.

Ongkili also added that, for Project 4A, the conditional award dated May 27, 2014 to SIPP Energy Sdn Bhd was retracted by the Energy Commission (EC) on Aug 6, 2015.

To solve the issue of potential power shortage due to the delay of these two projects, the EC had in mid-2015 carried out a bidding exercise to grant short-term extensions to independent power producers (IPPs) which power purchase agreement has lapsed.

The EC had awarded two extensions to 1Malaysia Development Bhd's (1MDB) 434MW Powertek plant in Melaka and YTL Power International Bhd's 585MW Paka Plant.

Earlier, Ongkili had told The Edge Financial Daily that a third extension was to be granted soon after technical matters are ironed out.

The Project 3B is housed under Jimah East Power Sdn Bhd, which is a special purpose vehicle between 1MDB and Mitsui Co, Ltd. However, 1MDB had later sold off its 70% equity interest to TNB for RM46.98 million in July 2015 as part of its rationalisation plan to pay off its debt.

The 2,000MW coal-fired plant has been delayed to June 2019 from the original October 2018 to facilitate the transfer of 1MDB's entire stake in the project to TNB.

The Project 3B was initially scheduled for commissioning in stages from Oct 1, 2018 when it was awarded to 1MDB-Mitsui in 2014.

For Project 4A, a new 1,000MW–1,400MW combined cycle gas turbine power plant in Johor was awarded to SIPP Energy Sdn Bhd on May 31, 2014.

The plant is slated to be operational by June 2018, but SIPP Energy is seeking a new partner for Peoject 4A after the EC rejected its proposal, but there are no takers.


Source - The Edge