Minister in charge of Energy, Lim Keng Yaik had said that Tenaga Nasional will be allowed to raise electricity rates very soon.

The reasons for the proposed hikes are untenable. What on earth has caused Tenaga’s financial problem and a RM30 billion debt burden?

One of the reasons is the high electricity reserve margin of 40% compared to international benchmark of 20%.

It is reported that Tenaga would be able to save a few hundred millions each year if the reserve margin is reduced to 20%. This action is deemed necessary to save the utility company from bankruptcy.

The reason for the high reserve margin is the contractual supply of electricity by the Independent Power Producers to Tenaga, which are not used.

To save Tenaga, there is a great need now to review the agreement with the IPPs.

Keng Yaik had said Malaysia is not a banana republic and therefore the government must honour agreements signed by the government.

I say Malaysia will become a banana republic if we do not get the agreement renegotiated.

So many concessionary agreements were signed by the previous administration and the rakyat is burdened by them.

There is no way out, Keng Yaik. Review the IPP agreements or consumers will suffer.