It’s the rakyat who will pay for power plant delays

AS this article goes to print, Tenaga Nasional Bhd will be in the final stages of commissioning the 1,000 MW coal-fired power plant in Manjung, Perak. The special-purpose vehicle undertaking the project is 12 days behind schedule and has to pay a fine of about RM500,000 per day, which comes to about RM6mil, to TNB under the terms of the power purchase agreement (PPA).

But a delay of 12 days for a project that runs over three years is no real delay. In large projects that are dependent on cashflow such as constructing and commissioning a power plant, delays running into months can make the project completely not viable financially.