Pass through… What??

By Shanker | TMI

I refer to the prime minister’s statement that independent power producers (IPPs) would not benefit from a power hike, as he’s quoted by The Malaysian Insider — “It is a pass-through tariff so nobody benefits.”

Er… what’s “pass through”? Could someone please explain in plain English, what is this new terminology? For the life of me, it sure seems to have escaped the notice of renowned economic and financial experts; don’t think you’d find it in anything that, say Paul Krugman, writes.

Yeah, and you thought Najib Razak’s acronym laden programmes were too much to stomach…by the time you managed to connect the ETP to the GTP and how it’s intertwined with the EPP which is then managed by the KOPI…

You get the point.

Now, if we could put away this seeming penchant that our PM has for acronym and terminology driven smoke screens, I’d sure like to try to make it plain and simple. Why, just a couple of days earlier, the Energy, Green Technology and Water Minister Peter Chin took a shot at providing an explanation: Hey folks, them subsidies, aren’t really subsidies. Yes sirree… all that happened was that Petronas sold gas below market price to the IPPs and in that process, ended up foregoing RM19 billion worth of profits.

Wow.

Either we have a minister who is trying to buy some breathing space by confusing us or he is pretty much confused himself.

What happens when a nationalised industry, such as Petronas, decides to forego profits? It means that the RM19 billion, which was intended to be social profits for the benefit of many, ends up instead as dividends accruing to a few shareholders. Whichever way you see it, what remains is that Petronas’s RM19 billion loss became the IPP’s gain.

Folks, if that isn’t subsidy, then I don’t know what is. Now, that’s the real pass through — RM19 billion “passed through” the rakyat.

RM19 billion’s a lot, isn’t it? Now, what would have happened if Petronas had actually realised that sum by selling the gas at market prices? The government’s kitty would have ended up with a couple of more billion ringgits. Think we could have done some good stuff with RM19 billion?

Hmmm.

Well, perhaps it could have provided scholarship funds for all high achievers in school, so that we don’t have to put up with the same, lame excuse of “tak cukup” allocation, year-in, year-out.

Gee whiz, I sure don’t want to start dreaming of more hospitals, schools, better transportation system, or better pay for our civil servants so that maybe, we get to hear less of “macam mana mau settle?”

And here’s the icing on the cake — the government says it has no power to make IPPs reveal the terms of contract.

This, coming from the same government that has no qualms incarcerating individuals without trial… since when did commercial contract rights become more important than human rights?

Mr PM, if you can authorise an on-the-spot RM15 million cheque in Sibu with “I help you, you help me” thrown in, then I am pretty sure you can bring those IPPs boys to the negotiating table. And if that doesn’t work, then I’d like to recommend to you that wonderful government mechanism known as tax. Try it. You might just impress Barack Obama. At least that’s what he tried to impose on CEOs who were given huge bonuses in the aftermath of the sub-prime loans fiasco.

And as for your “nobody benefits”, here’s a suggestion. Why don’t you make public the contracts, and let the rakyat judge if anyone benefits or otherwise? Surely the days of “government knows best are over”… no?

So, in plain layman’s language, that is what I understand as “pass through”. For the past 30 years, we had to endure many losses. According to Barry Wain, as much as US$100 billion had “passed through” the rakyat as a result of Umno’s failure at governance. I don’t really have to detail it; just read The Malaysian Maverick.

Mr PM, I sense the days are slipping further away from you, for you to make a firm and principled stand on socio-economic and governance matters that plague this country. It doesn’t help that every time you appear to try and move towards progress, all that is needed are a few barks from Perkasa or Utusan Malaysia and you pull back.

If all our pleadings for reform continue to falter at your doorstep, then I cannot wait for the day when Umno and company are made to pass through Putrajaya after we vote them out.