Monopoly Of Solar Deals In Malaysia

Monopoly Of Solar Deals In Malaysia Image
Malaysian Insider, July 25, 2012 Fong said SEDA could not stop the companies from taking advantage of the tender system.

The Sustainable Energy Development Authority (SEDA) today admitted that it had known about the potential for the alleged "monopoly" of its solar power contracts by Tan Sri Mohd Sidek Hassan's daughter, but said it had no legal power to refuse the awards.The renewable energy authority pointed out at a public briefing here that its online feed-in tariff (e-FiT) approval system was on a "first come, first serve" basis and applicants that fulfilled all requirements could not be rejected.


"But it acknowledged that bidders, noting a loophole in the system, had then applied repeatedly through various companies with the aim of snapping up a larger quota than the 5MW limit set for each application.According to SEDA's conditions, a single shareholder is limited to a maximum quota of 30MW."We are unhappy... but our legal adviser kept on telling us 'cannot do, cannot do (reject the application)'. This is a 'first come, first serve' basis and these are the consequences of the system so what the hell can I do?" SEDA chairman Tan Sri Dr Fong Chan Onn said.

DAP lawmaker Tony Pua with his PKR ally and fellow MP, Nurul Izzah Anwar, recently highlighted that Suzi Suliana Mohd Sidek and three other business partners own 12 out of 32 companies that they said won the "lion's share" or 32.4 per cent of the nation's solar energy quota.

Suzi's father, Mohd Sidek, had retired as the Chief Secretary to the Government last month and is the new chairman of Petronas.SEDA chief executive officer Badriyah Abdul Malek told the briefing the authority had discovered that "certain personnel" had snapped up a large chunk of the quota, but could not do anything to stop the award."It's not that we did not know... the next day, we knew it but we checked with the lawyers and the lawyers said 'no, you can't refuse (the award) because then they (the applicant) will sue you (SEDA) and there would be a litigation case'.

"We are only one-month-old... we cannot be embroiled in a litigation case so we are very, very careful," she said.She stressed, however, that an applicant's success in securing a quota did not automatically mean that contract is theirs to execute as the firm would still have to comply with several "milestones" set by SEDA.

These milestones include a licence from the Energy Commission, the registration of its REPPA Renewable Energy Power Purchasing Agreement (REPPA) with SEDA, the presentation of the company's banking documents showing that its finances are in order, and others.Pua had earlier pointed out to SEDA's officials that the spirit of the Renewable Energy Act 2011, which outlines the establishment of the online feed-in tariff system, was to ensure that no party would monopolise a chunk of the country's solar energy quota."Under the law, distribution should be fair, transparent and across the board, and under the ministry's guidelines, it should be non-monopolistic," he said.

Responding, SEDA's legal adviser Toh Beng Suan clarified that the 30MW limit applied to the size of the power plants, but was not a restriction on the individual applying for the contract."We tried as much as possible not to allow a monopolisation. But it did occur to us that even if you break your application down to 5MW, 5MW, 5MW... someone would just apply a lot."So if you look at the FiA (feed-in approval) rules, every time you get one FiA, it is treated as a separate plant and the law requires you to spend additional money to lay down separate cables and meters," she said.

Toh revealed that SEDA had consulted her when it realised that it had a few cases of one shareholder applying for a collectively larger chunk of the quota"But under the law, we do not have any legal basis to reject the applications based on that," she said.