PETALING JAYA: So prepared was the late Tan Sri Ani Arope for his death that he made his own preparations for his departure.
Ani, 82, had wanted his body to be put in the Tenaga Nasional Bhd (TNB) office where he had served for six years in the early 90s as executive chairman. It is understood that Ani had alerted them six months earlier of his wish.
His departure came at a time when TNB was in a far better shape than it had been when he left the utility giant. Ani was appointed chairman of TNB on Sept 1, 1990 when the National Electricity Board was corporatised and changed its name to the present TNB. Ani was often credited for bringing the national utility to greater heights during his tenure.
Today, TNB is the country’s second most valuable company on Bursa Malaysia with over RM78.2bil in market capitalisation.
The utility company also has a much stronger balance sheet and its debts are more balanced now. TNB has maintained prudent debt management with regards to its debt facilities. It had total debts of RM25.5bil as at financial year ended Aug 31, 2014 (FY14). Out of this, RM2.64bil is in US dollars while RM3.28bil is in yen.
For FY14, TNB posted a record net profit of RM6.46bil on a revenue of RM42.8bil.
TNB is no longer just a domestic champion. In 2001, the company made its first venture abroad with the construction of a 235MW plant in Pakistan’s Sindh province, via subsidiary Liberty Power Ltd.
Ani, who passed away on Saturday, had openly opposed the creation of the independent power producers (IPPs).
He stood his ground in 1995 rather than signing off on generous power purchase agreements (PPAs) with IPPs. Instead, he stirred the market by quitting rather than signing the lopsided agreements.
IPPs came into the picture following a near nation-wide blackout in 1992 when TNB was unable to meet the demands of the power-consuming industries. Thus, the Government then, led by Tun Dr Mahathir Mohamad, turned to them to supply additional power on a fast-track basis.
Under the PPAs, TNB has to pay for the extra power upfront, regardless of whether it is used or not. This means that TNB is paying substantially for power it doesn’t use.
Ani refused to sign the lopsided agreements and subsequently resigned. The first-generation IPPs, who were said to have got “sweetheart deals” at the expense of TNB, which had to buy up the excess capacity from them, are no more.
Although he had left TNB for close to two decades, Ani still followed closely the developments of TNB, judging from his postings on Facebook.
In an interview with StarBizWeek in June 2006, Ani disclosed that there were no negotiations with the IPPs when asked how the process of negotiations was conducted.
“There was no negotiation. Absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the Economic Planning Unit (EPU). And we were harassed, humiliated and talked down every time we went there. After that, my team was disappointed. The EPU just gave us the terms and asked us to agree. I said no way I would,” he was quoted as saying.
When asked on the pricing and terms of contracts, he said it was fixed. “(They said) this is the price, this is the capacity charge and this is the number of years. They said you just take it and I refused to sign the contracts. And then, I was put out to pasture.”
Ani said he disagreed with the terms because “it was grossly unfair”.
Ani’s resistance paid off in 2005 when under the Government-linked companies (GLC) transformation programme, it was decided that all IPP licences were to be awarded on an open tender basis.
In 2005, during the GLC transformation, Datuk Seri Che Khalib Mohamad Noh, the former president and chief executive officer of TNB, had already said that TNB would suffer unless the PPAs were renegotiated.
The Government announced that PPAs would not be renegotiated and would be replaced with a competitive tender focusing on the most competitive value propositions.
But only in 2011 did work start on the awarding of power plants on a competitive basis. The Energy Commission was given the mandate to handle the awards based on a competitive process.
The Government accrued some RM500mil derived from March 2013 when the PPAs were renegotiated for three IPPs.
In October 2012, first-generation IPPs Genting Sanyen Power Sdn Bhd and Segari Energy Ventures Sdn Bhd were awarded with an extension of 10 years to their PPAs.
TNB Pasir Gudang was awarded a five-year extension to its PPA. TNB Pasir Gudang, which is currently operating under an agreement, will operate as an IPP after 2017.
The rate for Genting Sanyen’s 675MW plant is 35.3 sen per kWh, while the rate for Segari’s 1,303MW plant is 36.3 sen per kWh. The rate for TNB Pasir Gudang’s 275MW plant is 37.4 sen per kWh.