When newspapers suffer from amnesia

Two weeks ago, on 31 July, The Sunday Star carried a three-page profile of tycoon Francis Yeoh Sock Ping.

The spread basically extolled Yeoh's rise to prominence in the corporate world. It proudly mentioned that his five listed YTL companies had a combined market capitalisation of around RM20 billion. YTL was also the first Asian company to be listed on the Tokyo stock exchange. The feature also devoted much space in examining Yeoh's religious faith and the role it played in his success.

But not once did the writer Kee Hua Chee talk about the independent power producer (IPP) licence that the Mahathir-led government had issued to YTL - a licence that has enabled the firm to earn lucrative profits. Was this an unintentional oversight or a case of amnesia and selective memory?

Consider this extract from an Asiaweek report in 1996:

(Tenaga Nasional Bhd's) earnings have been eroded by increasing competition from IPPs. Also, it was forced by the government to buy power from five of the biggest IPPs at rates higher than its own production cost. Tenaga is able to generate electricity at an average of just 3.4 cents per kwh because, unlike the new IPPs, many of its plants are fully depreciated. But in order to meet demand, Tenaga has to buy power from the five IPPs for 5.4 cents to 6.2 cents per kwh.

Further, Tenaga is obliged to buy up to 72% of the power generated by YTL Corp., one of the two biggest IPPs, even if the power is not distributed. YTL managed to secure a lucrative 21-year take-or-pay deal as it was the first IPP in Malaysia and also because the firm's managing director, Francis Yeoh, is a tough negotiator known to be close to the prime minister. The four other IPPs that have agreements with Tenaga are paid only for the electricity that is distributed. Still, the utility is required to pay them a capacity charge, which is compensation for the fixed costs of power generation.

Why didn't "The People's Paper" mention IPPs in their feature? Why didn't it discuss Francis Yeoh's "close" relationship with Mahathir (which Asiaweek had alluded to) and ask on what basis YTL was awarded such a lucrative deal? Why didn't it discuss to what extent Tenaga has lost out because of the deal? Maybe all this would have been a tad inconvenient to mention in such a glowing feature about Yeoh - so best to leave it out?