According to party chief of strategy Rafizi Ramli (left), the fine print in the government's announcement shows that the increase in cost borne by the independent power providers will in effect be passed to TNB, which will in turn pass it to end users in the form of tariff hikes.

Worse still, the new mechanism will mean that consumers will face electricity tariff hikes twice a year, since under the new "fuel cost pass through" mechanism, the cost of coal and gas used in power generation will be reviewed on a six-monthly basis.

"TNB achieves a status quo financially, the people bear the burden from the tariff hikes and the IPPs are not affected at all from this exercise because of the fuel cost pass through mechanism.

"This is really robbing the rakyat to feed the crony-capitalists," Rafizi told reporters today. He added that the tariff hike is likely to bring inflation levels to 2006 rates - the second highest in the past decade after the major spike in 2008.

"BN is repeating the same prescription in 2006 to 2011 - a combination of price increases for basic goods that include sugar, petrol, diesel and now electricity.

"The combined effect of this will see the inflation for 2011 surpassing that of 2006 and inflict difficulties to millions of households whose meager disposable income will be reduced further," he said.

Economists have warned that while 75 percent of households will escape the direct effect of the tariff hike, they will be burdened by a rise in inflation as industries pass on increased costs.

Wage hike not catching up with inflation

Food prices, which already recorded among the highest rate in April's inflation figures, is expected to be among the most severely hit.

Rafizi added that while Malaysian inflation rates have been lower than regional figures, its rise in wages have been dismal in comparison.

"In Indonesia the inflation rate may be in the region of 5 percent, which is higher than our 3.2 percent but their wage rise is about 10 percent on average. Ours have been 2.6 percent for the past ten years, which means our incomes are growing smaller every year," he said.

He also noted that low to middle income earners may also see higher tariffs as many users in this income bracket live in shared houses, and share the same electricity meter which would record usage higher than 300kWh.

"Ten people can be sharing the same electricity meter, which could record more than RM77 worth of electricity usage, but this does not mean there has been overconsumption," he said.

Felda must explain RM6 billion loan

Meanwhile, PKR central leadership council member and former deputy minister for land and cooperative development Dr Tan Kee Kwong questioned why the Federal Land Agency has reportedly taken a RM6 billion loan from the Employee Provident Fund.

"I want Felda to explain why they have had to borrow RM6 billion from the EPF. Is it true? It has been a week since the news broke out and there has only been silence so we can only assume it is true," he said.

Tan, who was in charge of Felda from 1999 to 2004 added that with crude oil palm prices at a high of RM2800 to RM3000 per tonne, Felda should in fact be reaping RM2 billion in profits per year and should not be taking loans. He also questioned Felda's business sense, as taking a whopping loan of RM6 billion would mean that the agency should have cash reserves of at least the same amount.

However, Deputy Minister in the Prime Minister's Department Ahmad Maslan last year said that Felda's reserves were at RM4.08 billion in 2004 but dropped to RM1.35 billion in 2009. But Ahmad clarified that the agency's reserve is stable with assets amounting to RM12.2 billion.

The revelation of the RM6 billion loan by Felda was made by PAS-linked NGO Persatuan Anak Peneroka Felda Kebangsaan (Anak) who produced meeting minutes by one of the agency's 300 settlements, Felda Nitar 02, referring to the loan.

source:malaysiakini

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