The developer’s wholly owned subsidiary – Tadmax Indah Power Sdn Bhd – received a letter from the Energy Commission on the go-ahead.
Tadmax’s contract for the 1,000MW-1,200MW plant was awarded directly in August 2016 by the previous Barisan Nasional government. The project has never been cancelled by the Pakatan Harapan administration, but it has remained mum on the matter for more than a year.
It said in its announcement to Bursa Malaysia yesterday that the government had agreed on Aug 29 to proceed with the development of a 1,000MW–1,200MW combined cycle gas and turbine power plant in Pulau Indah.
The announcement came some two hours after trading resumed after the midday break yesterday when the counter had already soared 10.71% to 31 sen.
Trading in Tadmax’s shares was halted moments later at 4.36pm after 13.3 million shares changed hands for the day. Trading will resume at 9am today.
The counter hit an intra-day high of 31.5 sen at 3.15pm yesterday. On a year-to-date basis, the share price has since risen 55%.
The status of the Pulau Indah power plant and another one in Kedah has been uncertain since May 2018 after the Pakatan Harapan government took control of Putrajaya.
The power plant in Kedah, which is at the planning stages, is privately held and said to be linked to the state royalty.
StarBizWeek had reported on Aug 31 that these two power plants were back in the limelight and unlikely to be cancelled.
Four power plant contracts were cancelled in July 2018 following the Energy, Green Technology, Science and Climate Change Minister Yeo Bee Yin’s move to review the country’s power reserve and supply situation.
She had previously said that Malaysia’s electricity reserve margin could reach a whopping 46% if the government does not cancel certain new independent power producer projects. It is currently at 35% and was close to 40% two years ago.
Now that the government has given the nod for the Pulau Indah project, a crucial point which remains unclear is the potential tariff rate that will be decided by the government, as this will determine the viability of the project.
The location of the RM3.5bil power plant in Pulau Indah is some 77km away from the main load centre and this could result in higher costs as a result of power loss during transmission due to the long distance.
What is notable about the power plant is that Selangor state-linked company Worldwide Holdings Bhd is also a shareholder in the project.
On Sept 14 last year, Tadmax inked a heads of agreement with Worldwide Holdings and Korean Electric Power Corp (KepCo) for the development of the power plant, subsequent to a memorandum of understanding signed earlier on July 27 last year.
Tadmax will own 40% of the power plant while Worldwide Holdings and KepCo will control 35% and 25%, respectively, under the partnership.
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