Only IPP contracts awarded through direct negotiations reviewed

Minister Yeo Bee Yin says an investigation found that four IPPs were not needed and were therefore cancelled. (Bernama pic)

PETALING JAYA: The energy, science, technology, environment and climate change ministry has no intention of reviewing existing independent power producer (IPP) contracts other than those awarded through direct negotiations, said minister Yeo Bee Yin.

She said a lot of IPP contracts were awarded through direct negotiations in 2017.

“These direct awards do not offer competitive rates and are not the best deals for the people,” she said after delivering a keynote address at the Sustainability Summit Asia 2018 here today.

In July, Yeo announced that the government had decided to cancel four IPP projects.

Two of these IPPs were the 700MW (megawatt) power plant project by Malakoff Corporation Bhd and Tenaga Nasional Bhd (TNB) in Kapar, Selangor; and the 1,400MW power plant by Aman Majestic Sdn Bhd and TNB in Paka, Terengganu.

The other two were the 300MW combined gas-hydro power plant project by Sabah Development Energy (Sandakan) Sdn Bhd and SM Hydro Energy Sdn Bhd at the Palm Oil Industrial Cluster in Sandakan, Sabah; and the 400MW solar energy quota to Edra Power Holdings Sdn Bhd for the development of a solar energy plant.

Yeo said the cancellations were due to non-compliance of conditions stipulated in the offer letters to the developers.

“The cancellations were made after Prime Minister Dr Mahathir Mohamad suggested that eight IPP contracts awarded through direct negotiations should be reviewed.

“The four cancelled were low-risk projects and the ministry found that they were not needed after a thorough investigation of the projects,” Yeo added.