Media Statement by Dr. Ko Chung Sen, MP of Kampar on 4th, December, 2013
It is outrageous to the suffering Malaysians that the share price of TENAGA NASIONAL BHD (TNB) shot up by as much as 27% to RM12.60 yesterday after the announcement of the hike in electricity tariffs. In fact, the trading of the share was suspended pending the announcement. It closed at RM10.72. Up 8.39% from the day before.
When the government announced the electricity prices would be increased next year yesterday, they claimed it was done to rationalize the subsidy and to consolidate the precarious fiscal position of our country. The extra income was also meant to be used for investing in the infrastructure of our national grid.
However, a research report by TA Securities dated 3rd, Dec, 2013 showed that TNB can now expect the profit next year to be RM5.016billion, up from RM4.614billion projected profit this year. A jump by a massive RM402million.The profit included the fuel cost compensation of RM1.12billion this year.
If the increase in electricity tariff by 14.89% was meant to reduce the subsidy burden paid out by the government, this should be reflected in the budget deficit, not in the annual earning of TNB. Why should the profit of TNB benefit from both the fuel cost compensation from the government and the increase in tariff paid by the consumers? Indeed the Target Price for TNB had been revised upwards by a massive 34% to RM13.23, from the previous traded price of RM9.89 before the tariff hike as per the TA report.
In this year’s budget, the subsidy allocated for the LPG, diesel and petrol (Bekalan 11, 020500, page 200) was increased from RM20,015,000,000 in 2013 to RM22,341,000,000 in 2014. So the real beneficiaries from the latest so called “subsidy rationalization” exercise are still the Independent Power Producers (IPP) and TNB while the poor suffering people have to tighten their belts more than ever. If the IPP and TNB were set up to serve the people as originally intended, they should share the burdens by reducing rather than increasing their profits and awarding big bonuses to their directors.