A power reserve shortfall may emerge as electricity from the Bakun hydroelectric dam on Borneo island may not be transmitted to Peninsular Malaysia as planned, Hasni Harun, who will become MMC's group managing director on May 3, told reporters in Kuala Lumpur today.
"We need more power in the future, and since Bakun is not forthcoming here, this side of the region needs more power," said Hasni, chief executive officer of MMC's Malaysian operation. "We are hoping for the government to make a decision fast and invite all the independent power producers to submit a competitive bid to build additional capacity."
MMC's power unit, Malakoff Corp., may expand the 2,100- megawatt, coal-fired Tanjung Bin plant in the southern state of Johor by adding 800 megawatts, Hasni said. Malakoff owns six power stations with a capacity of 5,020 megawatts, equivalent to 25 percent of the generation capacity in Peninsular Malaysia, according to its 2009 annual report. In 2007, Malakoff was taken private by MMC.
Malaysia emerged from its first recession in a decade in the final quarter of 2009, spurring demand for energy. Electricity demand for the first six months ended Feb. 28 grew 8 percent from a year earlier, national power utility Tenaga Nasional Bhd. said on April 20.
Shares of MMC, controlled by businessman Syed Mokhtar Al- Bukhary, fell 0.8 percent to 2.44 ringgit as of 3:06 p.m. local time. They have gained 44 percent in the past 12 months.
"With power from Bakun not available for the peninsular, there is a risk that by 2015, the reserve margin will decline to below the 20 percent threshold," Hasni said.
The reserve margin is the capacity in excess of total national demand.
MMC said it expects "better earnings" this year after 2009 net income slid 57 percent to 236.71 million ringgit.
To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at
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