Edra to collaborate with Malacca Govt to identify local companies for 4B project

Edra Global Energy Bhd will be collaborating with the Melaka Chief Minister Incorporated to identify state nominated Bumiputera and local companies to participate in the development of the new 2,000 megawatt (MW) to 2,400MW combined cycle power plant in Alor Gajah, Malacca commonly referred to as 4B.

Edra, which is the energy arm of 1Malaysia Development Bhd, will also accordingly be looking to get in touch with the local Bumiputera Chamber of Commerce, Edra's CEO Datuk Mohd Nazri Shahruddin said.

"The project will represent a viable platform to organise and coordinate competent Bumiputera and local contractors and vendors who are in the position to participate in this project," he said in a statement Sunday.

He said the Engineering Procurement and Construction (EPC) contract of 4B had specifically provided for local content requirements whereby the EPC Contractor shall give preference to the use of construction equipment and other equipment and materials and products produced and manufactured in Malaysia and to services supplied by contractors in Malaysia, he said.

The EPC Contractor shall also ensure that at least 25 percent of the total EPC Contract Price shall be denominated in Ringgit Malaysia and comprise equipment, materials and services manufactured by or procured from sub-contractors or suppliers in Malaysia, of which at least 30 percent shall be procured from Bumiputera contractors/suppliers in Malaysia and/or local Malaysian contractors/suppliers based in Malacca.

To address concerns from certain quarters over security of electricity supply under foreign ownership of Edra's assets, Mohd Nazri pointed out that all independent power producers (IPPs) in Malaysia are governed by their respective power purchase agreements (PPAs) and generating licences.

Regardless of foreign or local ownership, it is not a threat to the security of electricity supply in Malaysia.

The existing long-term PPAs have binding terms which do not allow for any changes to the agreed tariffs. There are also step in rights in the PPAs for Tenaga Nasional Bhd or Energy Commission should the IPP fail to fulfil or abide by the terms of the PPAs.

"The obligations of Edra-owned IPPs are governed by regulatory bodies such as the Energy, Green Technology and Water Ministry; Energy Commission, and others, regardless of its ownership structure," he explained.