EXPERIENCE IS THE TEACHER OF ALL THINGS
-Julius Ceaser

Saturday, June 11, 2011

The Kacang Puteh Seller And The GLC CEO

I post here an email from a friend for all Malaysians to open up your eyes and mind and decide the future of our country. How long are we going to defend the rich gets richer the poor gets poorer? 

The kacang puteh seller and the GLC

The political blooper of this decade must have been this. The minister of this ministry says- we can't do anything to reveal the details of the IPP agreement. 
I think this reaction is shared by many people in Malaysia. We almost fell off our chairs in disbelief. The government has no power to reveal the details of IPP contracts. If the government cannot declassify, who can?
I hope this minister will not be selected as a cabinet member the next time around IF the BN retains power. 
Two, this absent mindedness is increased further by the equally bizarre statement by the TNB CEO. By the way, he takes home a RM 1.2 million pay packet per year and we paid him to come out with this kind of statement. 
Profitability depends on being able to increase a take it or leave it price. You no pay you no electricity. He was thankful; the government has agreed to raise tariffs. TNB made RM 4 billion on revenue of RM 30 billion he's thankful, rising costs will not eat into the profitability. Yet he was practically crying throughout 2010 urging the government to review this and that. 

He ensures profits by raising tariffs but not by tackling the costs centers. Where is the source of much increase in costs? Do they come from increasing wages of its employees or payments to IPPs? Or business misadventures in Indonesia.
The price hike of TNB tariffs is a reprieve for TNB. Pray tell us then, where is the qualitative difference between a TNB CEO and a kacang puteh seller if both depend on a price INCREASE to be profitable? The answer none- because both their profitability is the result of raising prices. Anyone can increase profit by raising prices.

This isn't what we expect from a CEO who earns maybe close to RM 100 k a month. We expect him to be profitable because of efficiency, because of cost cutting measures, because of streamlining operations and because of far sighted procurement policies. So the TNB of now that he helms, hasn't moved qualitatively from the TNB he started to lead. A few years ago, he justified the massive losses in coal purchasing deals that went awry as being not worrying because TNB's earnings are humongous. TNB earns billions each year. 

So, because you earn a lot, its ok to lose a few billions of public money. 

We therefore hope his contract as CEO will not be renewed. Nothing personal, just business. 
As a first start to cost cutting measures, we suggest therefore the top TNB bosses volunteer to have the pay cut and that portion be distributed as wages to lower income staff members. Why? Because TNB staff is some of the lowest paid workers in the country. 

The big chiefs in TNB whose only managerial prowess nowadays seem to pressure the government to raise tariffs are shocking. The CEO earns RM1.8 million a year in total. TNB's second executive director, who was appointed in April 2010, received a total remuneration of RM755, 320.22, including his basic salary of RM457, 440.

What of the TNB 'Indians'? While paying the big chiefs the above amount, in the same year, TNB kept its minimum wage at RM750 a month, only slightly higher than POS Malaysia's RM635.

The wage difference is scandalous. The CEO has been responsible for some heavy losses and he has presided over some bad deals over the purchases of coal fields in Indonesia. He should have his salary reduced or even relieved from his post. But as usual, government linked companies (GLCs) which tended to be top-heavy pay their CEOs huge salaries seemingly to reflect their managerial talent.

It's time for the government to cap salaries for the bosses so that wealth could be spread towards the bottom through better wage schemes.

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