On Facebook yesterday, I was asked to comment on the award of Edra to China General Nuclear Corporation, a global giant, for USD2.3 billion.
I wrote this morning:
"I'd have preferred that Edra had gone Tenaga's way as I'd written h e r e last week.
But a blessing undisguised, really:
1. CGN is paying some RM2 billion more (than what YB Rafizi Ramli said 1MDB should be getting for Edra, here), money much needed by 1MDB for its rationalisation program.
2. Nobody can accuse Tenaga of bailing out 1MDB now. Sob! If Tenaga had won, PM Najib Razak would have been slammed for ordering a bailout, whether the national utility had offered to buy at RM8 b or RM18 b
3. Tenaga does not need to increase its borrowings to buy Edra after all. It means it can focus on existing operations and investments. (Tenaga is also managing a few assets abroad).
4. Edra is about power "generation". Tenaga still controls "transmission" and "distribution", the two more critical components of the business. Even without Edra,,Tenaga still controls half of the domestic power generation. Whoever generate power does not get to determine tariffs, unless it's a monopoly.
5. Lastly, CGN is a large foreign investor. Foreign investors before CGN came in not just with money, they created jobs and competition, transferred technology and generated important spin offs."
|Edra's power assets|