Posted by leek > 2014-02-08 11:41 | Report Abuse

THE unprecedented delay in the award of the multi-billion-ringgit 2,000MW coal-fired power plant under Project 3B underlines the intense politicking involved in the decision-making process.

Malaysia’s Energy Commission (EC), the body set up to regulate the energy sector, has not kept to its self-imposed Jan 20 deadline to announce the winner of the tender.

The Government had early last year called for bids to build a 2,000MW plant to supply electricity to the Government under a 25-year concession, a project that is said to cost around RM11bil. Out of the five shortlisted bidders, two have ended up in a neck-and-neck race for the project, namely YTL Power International Bhdand 1Malaysia Development Bhd (1MDB).

“All decisions seem to be on hold. But the EC cannot afford to drag the matter for long, as this is casting a negative light on the whole awarding process. The technical evaluation has long been done, so what’s holding the process back?” asks an industry insider.

Industry observers reckon the issue could cloud investor perception on future tenders by the energy regulator, more so as it also involves international players as partners for some of the bidders.

“So far, the EC has rightly instituted open tenders to make the industry more transparent, competitive and efficient,” says one industry player.

The EC did not get back to StarBizWeek’s queries as at press time.

For Government-linked 1MDB, a win is the catalyst it needs to list its power assets, while for YTL Power, it is a breakthrough, given the impending expiry of its first-generation power-purchase agreements (PPAs) for the Paka and Pasir Gudang power plants in September 2015.

Since building and operating the first independent power plant in the country in 1993, the company – controlled by the Yeoh family – has not won any new projects for power plants locally.

For Project 3B, YTL Power submitted the lowest bid at 25.12 sen per kilowatt hour (kWh), while 1MDB’s 25.65 sen per kWh is only marginally higher.

Adding a twist to the tight race is the fact that YTL Power has teamed up with the Sultan of Johor, Sultan Ibrahim Sultan Iskandar – via SIPP Energy Sdn Bhd – to bid for the project. The proposed site for YTL Power’s planned plant for the project is in Tanjong Tohor in Johor. The Sultan recently declared his interest to be involved in the corporate world.

From the beginning, YTL Power was tipped to be the frontrunner in the tender but since then, reports have surfaced indicating that 1MDB is the EC’s preferred bidder.

It has been reported that despite YTL Power making the lowest bid, the true cost of its proposal could be much higher, given that the distance of its proposed plant in Tanjong Tohor is two to three times further from the nearest entry point into Tenaga Nasional Bhd’s (TNB) grid, as compared with the other bidders.

So, there is the issue of the additional cost of building the transmission line connecting the plant to the grid.

There were also some compliance issues with YTL Power’s foreign boiler partner, but that has apparently been settled with the EC’s technical evaluation committee.

On the other hand, 1MDB’s proposed site in Negri Sembilan is next to the 1,400MW coal-fired power plant in Jimah, of which 1MDB is in the midst of acquiring from the Negri Sembilan royalty.

Hence, 1MDB’s proposed plant for Project 3B is expected to share common facilities with the Jimah plant, a move some industry players say would bring down costs. It has been reported that 1MDB’s proposed plant’s access point to the grid is Olak Lempit, Selangor, which is much closer to the main load centre in the Klang Valley.

However, some industry players argue that the cost of building the transmission line should not surface, given that it was the EC that had initially named the access points to be used by the bidders in their tender proposals.

This being the case, they say once the power reaches the access point, it becomes the responsibility of TNB to manage thereafter.

Industry players reckon that the internal rate of return (IRR) – the widely-used formula for gauging the value of an investment in a project – for the 2,000MW plant is likely to be in the high single-digit range. The older independent power producers have enjoyed a higher IRR, but the Government is now stricter with the terms of power concessions.

Nevertheless, industry experts say that the high single-digit IRRs offered in the new power concessions are still lucrative, as they provide cash-generating recurring income to the owners.

YTL Power’s current PPAs from its two existing plants will expire next year. Analysts have long pointed out that its operating cashflow would be weaker in the coming years. Even its overseas assets such as YTL Power Seraya Ltd in Singapore are facing greater pricing competition.

“This (bid) would provide YTL Power with more consistent cashflows from 2018 onwards,” said CIMB Research in a recent report, adding that winning Project 3B would be

Posted by leek > 2014-02-08 11:42 | Report Abuse

“This (bid) would provide YTL Power with more consistent cashflows from 2018 onwards,” said CIMB Research in a recent report, adding that winning Project 3B would be a re-rating catalyst for YTL Power.

Project 3B will be commissioned in stages through October 2018 and April 2019.

In the case of 1MDB, meanwhile, Project 3B would increase the value proposition of its energy assets’ initial public offering (IPO), giving it the “growth angle” fund managers seek.

Bankers say that the fund would face a difficult task listing its existing power assets without a growth catalyst, given that its existing power assets are nearing the end of their concessions and new deals are yet to be negotiated.

In the last two years, 1MDB grabbed headlines when it went on a buying spree of power assets, forking out RM12bil for power plants from tycoon T. Ananda Krishnan and Genting Bhd.

1MDB recently called for proposals from investment bankers to pitch for advisory roles to list its energy assets. Wire agencies have reported that the fund is planning to raise US$1bil or RM3.28bil by spinning off its power assets targeted by the middle of this year, which would make it one of South-East Asia’s largest IPOs to date this year.

Posted by leek > 2014-02-08 15:35 | Report Abuse

EC committees risk their jobs if giving the contract to YTLP 
but they will risk their lifes if giving the contract to 1MDB... 
No wonder dare not make the announcement until now... 

Easy job to ask N.Sembilan ruler to give up by the ruler of Johor... hehe

Posted by leek > 2014-02-08 16:53 | Report Abuse

The only reason why johor sultan n ytlp might lose it because ytl is offer by pm to get the high speed train project.... and of course the sultan will gain more to partner with ytl for the train project... anyway, johor sultan is strong enough to swallow these 2 projects with ytl... he can gao dim the pm...wait n see

Posted by cgtan2020 > 2014-02-08 21:24 | Report Abuse

http://www.thesundaily.my/news/950891

Posted by cgtan2020 > 2014-02-08 21:25 | Report Abuse

PETALING JAYA (Feb 6, 2014): YTL Communications Sdn Bhd's, the telecommunications arm of YTL Corp Bhd, could be abandoning its WiMax service which it has adopted since November 2010 to roll out its long-term evolution (LTE) technology.

Hong Leong Investment Bank's analyst Tan J Young believes that Yes, the brand name of YTL Communications in Malaysia, has stared trial runs and is preparing to roll its Time Division Duplexing-Long-Term Evolution (TDD-LTE) soon.

"LTE trials are currently conducted not only on the 20MHz of 2.6GHz spectrum which was awarded by MCMC in 2012, but also on its 30MHz of 2.3GHz spectrum which is presently occupied by its commercial WiMAX business," he said in an note to investors today.

"Surprisingly, trials are also being carried out on Asiaspace Broadband Sdn Bhd's 30MHz allocation on the 2.3GHz band," he added.

This, he said, could indirectly mean that Yes could be eyeing to take over Asiaspace's spectrum which is currently idle as the latter's WiMAX business did not materialise.

Asiaspace was awarded the 2.3GHz spectrum in December 2012 and was one of the four operators along with P1, YTL's Yes4G and REDtone that received the WiMAX licence from the government in 2007.

A check on Asiaspace's website revealed that the company is planning to go ahead with its collaboration with YTL on infrastructure and spectrum sharing under an agreement now that it has a 2.3GHz spectrum.

"With the collaboration, there will be avoided duplicity of infrastructure and maximize the use of bandwidth for the wireless broadband services nationwide by both companies to provide quality and uninterrupted services," it siad.

Young said Yes' exit from WiMAX was an anticipated move as the technology is widely believed to be phasing out and LTE is the only logical technology progression for telcos.

"If Yes lobbies successfully for Asiaspace's spectrum, it will allow Yes to migrate its existing WiMAX subscribers to LTE seamlessly while providing better quality of service," he said.

"Upon complete migration, Yes could use the whole 60MHz of 2.3GHz to offer TDD-LTE with theoretical download speed of up to 220Mbps (assumed based on latest carrier aggregation technology with 2 component carriers coupled with downlinkuplink time division ratio of 3 to 1)," he noted.

With this capability, Tan said, Yes can be a competent challenger to the incumbents with the niche of offering rich and high definition voice and text services over a pure advance data network supported by IMS, without the worry of legacy voice network.

"We believe that compatible devices will be abundant in the near future on the back of China's commitment following recent TD-LTE licence awards which also consist of 2.3GHz spectrum. Notably, this (LTE band 40) is supported by iPhone 5S (model A1530)," he pointed out.

"If Yes does invade the LTE market as such, this will undoubtedly elevate the competition in the cellular space one notch higher, while benefiting the fixed players through data bandwidth wholesale for backhaul transmission. Overall, this coincides with our sector outlook whereby we prefer fixed," he said.

Posted by Fat Cat Tim Buddy > 2014-02-09 12:43 | Report Abuse

develop yes4g was a mistake, so far ,it is proven.. 3 years non-stop losing money..

in the future maybe it will be very profitable.. or not.. who know..

one thing for sure is, ytlpower shareholders has been punished since ytl-p acquire yes4g from ytl-e , i wonder why no shareholders reject the proposal of buying yes4g at that time?

Posted by hng33 > 2014-02-10 09:08 | Report Abuse

Lets think again, if without Yes Wimax, YTLP won't be able to secure 1Bestarinet project, contract for 15 year worth RM 4.5b + Virtual learning Frog + chromebook, derive stream of consistent fees from gov RM 300m /year......Just completed end of of last year and will start contributing these year onwards. YTLP Yes Wimax offer more than 1BestariNet requirement, minimum speed 4Mbt. Therefore, YTLP will retain Wimax for 1BestarNet and parallel migrate to LTE for retail customer

Posted by Fat Cat Tim Buddy > 2014-02-10 09:19 | Report Abuse

1bestari.net is a songlap project, u know i know all ppl know... kikiki..

but as shareholders , who care about the project, all they want is good dividend and steady profit, and that is what ytlpower suppose to deliver since it is a utilities company.

the yes4g should be fund by ytl-e itself, but since ytlpower is a cash cow, so they decided to let ytlpower take the burden of loss..

Posted by Peter5151 > 2014-02-10 09:31 | Report Abuse

With LTE, the speed is only 220Mbps, this is a joke. In Korea, I think there are talking about Gbps?

Posted by Peter5151 > 2014-02-10 09:38 | Report Abuse

Will YTLP ever caught up with the latest technology? I doubt so, this is not the area that they good in..They are good in power / utility etc..

Posted by Peter5151 > 2014-02-10 09:47 | Report Abuse

Unlike the power generation, ytlp is leading the industry, in Telecommunications, it forever playing the caught up game. B4 it can optimum the profit or even make a profit, the technology change, it need to invest all over again. In short, ytlp is a follower not leader in the telecommunications. .

Posted by Peter5151 > 2014-02-10 09:48 | Report Abuse

It's not the market maker in Telecommunications. ..

Posted by hng33 > 2014-02-10 10:08 | Report Abuse

Fat Cat Tim Buddy

If without venture into broadband in 2010, of course YTLP can afford to continue payout 75% dividend quarterly but share price will firmly stay above RM 2.50 and yield ay 5% net. But we are somehow lucky as if invest in YTLP at the end of its downtrend period 2013/2014, and cost of investment is relatively low now, while potential to enjoy turnaround of its broadband these year onwards.


Peter5151

When YTLP first venture into broadband in 2010, it adopt Wimax 4g which is fastest at that time compared to Maxis/Celcom 3g. However, YTLP fully aware that even Wimax is mature tech but technology evolution happens all the time, so YTLP built its network to be a flat IP [Internet Protocol] network, so any IP-based technology can plug into our network. Therefore, adding LTE is as simple as adding a channel card.

It is until last year 2013, Maxis and Celcom start to migrate its 3g to 4gLTE, but YTLP still laggard behind as it busy with its 1BestariNet project, which its secure in 2012 for contract 15year, based on its 4g Wimax that need minimum speed 4Mbps and only until late 2013 the 1BestariNet is completed. These year onward, Therefore, only these year onward, YTLP will start migrating its network from 4gWimax to 4gLTE for retail customer, but will still retail its 4gWim
ax cater for 1BestariNet

Posted by Fat Cat Tim Buddy > 2014-02-10 10:18 | Report Abuse

kikiki.. hng33 u r right, i already made a handful from ytlp-wb... lets hope for the best in future.. kikiki...

but what i really hope for is ytlpowr change name into ytl - utilities and spin off yes4g, and then only concentrate on utilities like water and electric , and high dividend... kikiki thats more like it..

Posted by hng33 > 2014-02-10 10:27 | Report Abuse

YTLP should perceived as infrastructure company, business focus on people daily need....power supply, water, sewerage treatment, of course broadband which is essential in today tech world.

Broadband profit margin is very high once its have develop all station base, wide coverage and hit certain threshold customer base. We should wait and see YTLP deliver its maiden earning from broadband these year onwards.

Posted by Fat Cat Tim Buddy > 2014-02-10 10:34 | Report Abuse

people daily need... roti nasi also is essential ... kikiki...

too many internet provider already la, the margin will get squeeze for sure... if im uncle yeoh, i will sell yes4g if the price is not too bad.. kikiki...

Posted by Peter5151 > 2014-02-10 10:36 | Report Abuse

I'm not that optimist for the future profit for the broadband of ytlp. We are talking about Outernet now, the USA is testing the new technology for free wifi for the world...how to make profit, not even a leader in today market. .

Posted by leek > 2014-02-10 10:45 | Report Abuse

The profit is handsome if govt give all IT projects to ytl...

Posted by smartly > 2014-02-10 10:47 | Report Abuse

LOL !

Posted by cgtan2020 > 2014-02-10 10:59 | Report Abuse

cheap sales 64.5 cents

Posted by smartly > 2014-02-10 11:37 | Report Abuse

now 64.5sen become not cheap anymore.

Posted by hng33 > 2014-02-10 16:39 | Report Abuse

Volume still low....will sbb marked up to fill at least 2.5m share !?

Posted by smartly > 2014-02-10 16:53 | Report Abuse

sbb 1m only i think.

Posted by hng33 > 2014-02-10 16:58 | Report Abuse

I bet sbb about 1.5m share today.

I also on today buyback CAP at 29sen, expecting its final dividend

Posted by hng33 > 2014-02-10 17:33 | Report Abuse

Bought back 1.6m share, 78.2% of today total volume, all at 1.85, increase stake 0.02%, cumulatively at 9.49% in treasury stock now

Posted by smartly > 2014-02-10 17:56 | Report Abuse

when reach 10%, ytlp can propose shares div 10:1

Posted by cgtan2020 > 2014-02-10 21:30 | Report Abuse

most likely cancel to enhanced EPS.

Posted by leek > 2014-02-11 05:52 | Report Abuse

http://www.btimes.com.my/Current_News/BTIMES/articles/20140210234230/Article/index_html

media fight continue...

Posted by cgtan2020 > 2014-02-11 08:37 | Report Abuse

1MDB's bid of 25.33 sen/kWh less than 1pc higher than YTL's


1MALAYSIA Development Bhd (1MDB) could be announced as the winner of a multi-billion ringgit power plant project as early as today at the expense of YTL Power International Bhd.

Sources said the Energy Commission (EC) has picked 1MDB to build a 2,000 megawatt power plant, coded Track 3B, after the company had submitted the most competitive bid.

It is now up to the Cabinet to decide on the winning bid, and sources said this could be made at a meeting today.

According to the sources, 1MDB was chosen ahead of early favourite YTL Power after the EC had looked at the overall cost.

"It looks like 1MDB has come out cheaper overall, after taking into account both the bid tariff as well as additional costs incurred to deliver electricity to consumers," a source said.

YTL Power had put in the lowest bid at 25.12 sen per kiloWatt hour (kWh), while 1MDB's bid is less than one per cent higher at 25.33 sen/kWh.

However, additional costs from potential transmission losses due to YTL Power's proposed plant site being three times further from the major load centre compared with 1MDB's site, played to the latter's advantage.

1MDB has proposed to build its power plant next to its recently-acquired 1,400MW coal-fired power station in Jimah, Negri Sembilan.

The sources said all bidders, with the exception of YTL Power, had proposed plant sites that are located within the country's major load centre.

YTL Power's site in Tanjong Tohor, Johor, is roughly 160km from the primary load centre, they noted.

The sources said YTL Power's boiler supplier also has lesser experience and an untested track record compared with all other bidders, which would potentially put energy supply at risk.

"To compare bids, the impact on total system costs has to be taken into account. Additional costs to the government, mainly to be borne by Tenaga Nasional Bhd, include transmission line losses and likely construction of new transmission lines that can run into hundreds of millions of ringgit," the source explained.

"We have to look beyond the bid price to the overall costs that in the end will be borne by consumers and the taxpayers. When the government looks at transmission line losses and the prospect of major new infrastructure cost, the real cost of electricity in this bid is a lot higher," the source added.

Industry players have estimated between two and five per cent transmission losses, depending on the capacity of the transmission line.

A rough calculation shows that a two per cent transmission loss will bump YTL Power's tariff to 25.62 sen/kWh, while a five per cent transmission loss will mean its tariff balloons to 26.38 sen/kWh.

Even in the best case scenario, the group's bid price is higher than 1MDB's 25.33 sen/kwh, the source said.

This has also not taken into account any infrastructure costs that will likely come with having a plant in Tanjong Tohor.

Read more: 1MDB to land power project? http://www.btimes.com.my/Current_News/BTIMES/articles/20140210234230/Article/index_html#ixzz2syA9TCVe

Posted by leek > 2014-02-11 08:43 | Report Abuse

Lolz... huat lai liao....

Posted by lbhock123 > 2014-02-11 08:46 | Report Abuse

??!!

Posted by leek > Feb 11, 2014 08:43 AM | Report Abuse

Lolz... huat lai liao....

Posted by hng33 > 2014-02-11 09:10 | Report Abuse

Better decide fast, get rid of uncertainly, and move forward. As mention earlier, if YTLP failed to secure 3B project, it could be even better for shareholder, as YTLP don't incur another round of huge capex to develop 3B, instead concentrate on its about turnaround broadband business these year and introduce 4g TD-LTE and manage its cash hoard to continue sbb, enhancing value of the share

Posted by hng33 > 2014-02-11 09:12 | Report Abuse

smartly, CAP share seem moving.. .

Posted by smartly > 2014-02-11 09:25 | Report Abuse

hng33, u r on yr right timing for your cap. :)

Posted by hng33 > 2014-02-11 09:27 | Report Abuse

CAP have 20% dividend policy that state in its IPO for financial year ending 2013 and 2014. In addition, Chinese Yuan also strengthen against RM from 1 Yuan : 0.52 RM to current 1 Yuan : 0.55 RM.

Based on estimate EPF 15sen for 2013, its dividend payout should be 3sen, consist of 1 sen interim and expected 2 sen upcoming final dividend.


Since CAP bonus issue involve only free warrant (unlike Right or private placement which have immediate dilution earning), its financial won't be affect in the short term. Therefore, the dividend policy should be able to materialize, at least reward shareholder.

At current 29sen, i think downside risk should be minimum and plan to hold on till it announce Q4 result + final dividend

Remark: CAP is china base company, investor must bear its risk and reward higher than local base company

Posted by gark > 2014-02-11 09:54 | Report Abuse

The energy commission is making up excuses to give the project 3B to 1MDB no matter what is the cost. It is the EC that drafted the 5 injection points in the tender including Yong Peng where YTLP is injecting. If now all the cons of transmission is spelled out, why put Yong Peng as one of the 5 injection sites.

Anyone with half a brain will think why not the Yong Peng injection power supply to be diverted to Johor instead? Why must pull all the way to klang valley? If the intention is klang valley, why put yong peng as an approved injection site in the first place.

Pure nonsense.

Posted by gark > 2014-02-11 09:58 | Report Abuse

Also EC mentioned below ...

The sources said all bidders, with the exception of YTL Power, had proposed plant sites that are located within the country's major load centre.

This is nonsense.. 2 companies proposed tg. Tohor johor, 1 company proposed in Perak, 1 in carrie island, one in Jimah

ALL the above is spelled out in the AS APPROVED SITES IN THE TENDER

If want to give 1MDB no matter what is the cost, then just give lah, no need give all these stupid excuses which is approved in the tender in the first place.

EC has lost all credibility

Posted by hng33 > 2014-02-11 10:03 | Report Abuse

EC call for open tender and yet lowest bids unable to secure project...1MBD is brainchild of PM and newcomer/inexperience compared to YTLP, the first IPP player and have global reach in energy field.

It will definitely will affect both local and foreign investment. Its better continue to do back door and direct deal with prefer party instead of wasting time to call open tender, give false hope and invite serious both local and foreign investor to participate.

Posted by Fat Cat Tim Buddy > 2014-02-11 10:04 | Report Abuse

if lost, better sue the EC , bring the case to supreme court kikiki.. btw gark.. u miss axreit, now up so much already garkgarkgark...

Posted by Fat Cat Tim Buddy > 2014-02-11 10:07 | Report Abuse

1mbd issue the bond in us dollar, if ringgit keep depreciating , they going to have hard time just to pay interests... kikiki sooner or later , taxpayer money will going to be use for bailout.. just as usual... kikiki

Posted by gark > 2014-02-11 10:07 | Report Abuse

why do you think i missed it :P

Posted by Fat Cat Tim Buddy > 2014-02-11 10:08 | Report Abuse

i tot ur tp 2.44 ? kikiki..

Posted by gark > 2014-02-11 10:09 | Report Abuse

Ah you have been reading the other forum... if you trace back 2.88 is my original target, 2.44 is smoke and shadows only... :P

Posted by gark > 2014-02-11 10:10 | Report Abuse

fat cat kikiki what your other nick? :P

Posted by Fat Cat Tim Buddy > 2014-02-11 10:13 | Report Abuse

my other nick.. fei mao, kikiki..

so you manage to buy at 2.88 before ex date? gong hei gong hei... really fatt choi liao.. garkgarkgark...

Posted by gark > 2014-02-11 10:14 | Report Abuse

up a bit also fat choy already? so low expectations ah fat cat?

Posted by gark > 2014-02-11 10:14 | Report Abuse

:)

Posted by Fat Cat Tim Buddy > 2014-02-11 10:16 | Report Abuse

more to come... kikiki.. dont too greedy la, it go up 10% in less than 1 month , ' too greedy will lead to poverty ' kikiki..

Posted by Fat Cat Tim Buddy > 2014-02-11 10:19 | Report Abuse

yesterday i sell my ytl at 1.58, this 1 really is lapsap stock... kikiki no eye see..