By G. Sharmila
The Energy Commission (EC) board will award Project 4A, which is a gas turbine power plant with a 1,100- 1,400 megawatt (MW) capacity to be built in Johor, on a direct negotiation basis, according to a report in The Star today.
Citing sources, The Star said that the decision will be made by the Planning and Implementation Committee for Electricity Supply and Tariff, which falls under the purview of the Energy, Green Technology and Water Ministry. The EC has decided that the plant should be completed by 2018.
According to The Star, the benchmark for Project 4A is the RM 3 billion combined-cycle gas turbine Prai power plant, which was awarded to Tenaga Nasional Bhd (TNB) in late 2012. The new 1,071MW Prai power plant is expected to commence operations by March 1, 2016 at a tariff of 34.7 sen per kilowatt-hour (kWh).
Yesterday, The Star reported that TNB union officials had met with EC chairman Abdul Razak Abdul Majid on Monday to put forth their views that the awarding of power plants should be via a competitive tender process to ensure efficient price discovery.
The paper also said that a union official voiced an opinion that should the competitive tender process be discarded, it would result in higher prices for consumers.
Meanwhile, the Business Times reported yesterday that the EC is expected to award either the Track 4A or 4B power plant projects via direct negotiations, adding that speculation is that a consortium led by YTL Power International Bhd is likely to bag either project.
Citing sources, the paper said that the EC is expected to release a letter to a private company to build a 1,400MW closed-cycle gas turbine power plant in Johor, to be completed in 2018. The commission has also told grid owner (TNB) to do the necessary to expedite the completion of the southern line 500-kilovolt link, the paper said.
The southern link, which links Lenggeng in Negeri Sembilan to Yong Peng in Johor, will provide interconnectivity between the new power plant and the national grid. According to the paper’s sources, although the EC was told that the southern link can be completed by December 2019, it wants an earlier completion date.
The reports by The Star and Business Times contradict what the EC chairman had said earlier this month, namely that the multi-billion ringgit power plant projects under Track 4A and 4B will be awarded via competitive bidding. According to Business Times, the EC awarded contracts to build Track 1, 2, 3A and 3B through this process.
Prior to the EC chairman’s announcement, The Edge Financial Daily had reported that Project 4A would be awarded via direct negotiations. Citing sources, the paper also said that a consortium involving YTL Power International Bhd would be awarded Project 4A.
At press time, the Energy Commission had yet to respond to questions from Kinibiz.
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