Liberalising the power sector is 1 of the first things Yeo has in mind to allow Malaysians to receive a better utility service
by SHAHEERA AZNAM SHAH & NG MIN SHEN/ pic by RAZAK GHAZALI
LET’S admit it. No one wants to be in Yeo Bee Yin’s (picture) shoes at the moment.
With an extended portfolio (while taking people to court for environmental injustice) as the minister of energy, science, technology, environment and climate change, Yeo certainly has her plate full.
For a year and two months after Yeo was sworn in to lead the ministry, she has faced tough and tricky challenges.
From the radioactive waste management issue at Lynas Malaysia Sdn Bhd’s facility in Pahang to the heaps of containers of smuggled plastic waste that had been hoarded by unscrupulous enterprises in our own backyard and the annual affair of cross-boundary haze, Yeo seems to have jumped straight into the fire from the moment she said “I do”.
But her dedication might have been depicted truthfully when she was fully prepared with facts and figures about the toxic pollution at Kim Kim River in Johor, although the calamity occurred days before her wedding ceremony.
Between checking the illegal plastic waste at the ports and visiting schools to advocate science and technology, Yeo told The Malaysian Reserve (TMR) that her ministry has been focusing on the brown issues while had her hands tied in drafting environment laws.
“There have been firefighting efforts and policymaking. The real difference that I can make is through changing the institutions because the ministers come and go, but the policies stay and have a long-term impact on people,” Yeo said.
In the beginning, it took Yeo two weeks to grasp and have a clear vision of what she wants to achieve as a minister.
“I was unsure of what to expect, and then I realised there are so many things in the science and technology department to oversee.
Liberalising the power sector is 1 of the first things Yeo has in mind to allow Malaysians to receive a better utility service Yeo Bee Yin — gearing for a more action-packed year “I always tell people that I’m not only taking care of the sky and sea, I’m also taking care of the outer space as National Space Agency (Angkasa) is also under my ministry,” she said.
Yeo said 2020 would be an even more “actionpacked year” as her ministry will execute 80% of what she currently has in the pipeline for the Malaysia Electricity Supply Industry (MESI) 2.0 — a plan to reform the power industry.
“Technology changes very fast, as well as government and politics. So, I see my work here as laying the foundation for the future, and at the same time, achieving my goals for the next two years,” she said.
Yeo is also confident that the ministry is on track to make a difference and tackle some of the hindrances including a shortage of manpower and lack of resources.
“The next couple of years, we need to put our thoughts and plans that are being visualised in a big frame, into smaller actions to generate real impact for the people,” she said.
De-monopolising the Power Industry
Liberalising the power sector is one of the first things Yeo has in mind to allow Malaysians to receive a better utility service.
“It (de-monopolising) is ideological. What is practical is that people can get the best through competition in the market,” she said.
Tucked under the 10-year MESI 2.0 plan, the liberalisation will see a halt in approving new independent power production projects which includes power purchase agreements (PPAs).
“One thing that is very close to my heart is MESI 2.0. I’m glad that the Cabinet approved the principle of how we want to open up the retail and fuel procurement markets, and that we want to move from the PPA regime into a wholesale market,” she said.
Yeo is convinced that most of the strategies to reform the industry, including the structural and policy changes, will be approved next year, while executions will begin from 2020 onwards.
“It’s not something juicy and it’s not political. It’s important to me to be able to get the best for the people and we have been working for it,” she said, adding that she has less than two years to implement it.
Leverage on Start-ups
While it is a common practice in other countries for start-ups to be heavily invested by private funds, Yeo said, it is not the case for Malaysia.
Over the years, the value of the investments in venture capital (VC) and VC funds by private entities in the country has been declining while the government has been densely investing in start-ups.
However, Yeo said her ministry had not had much luck in start-ups that they solely invested compared to the fund of fund (FoF) model — a combined fund between the government and private VCs.
“There are more public agencies-driven and it’s very strange. In most countries, their private VC funds invest more in start-ups, but in Malaysia, the government invests more and we are not always good in choosing winners.
“Historically, all the ones that are managed by the government are loss-making. The ones with returns are always on the FoF model,” she said.
Due to the circumstances, the Ministry of Energy, Science, Technology, Environment and Climate Change (MESTECC) is consolidating five VCs under the ministry to restructure and streamline their functions in managing start-ups; a plan that was approved by the Cabinet in July.
“We were given five funding agencies and we found out that technology start-ups in Malaysia have too many agencies offering similar things and there is too much redundancy,” she said.
The agencies include Malaysia Debt Ventures Bhd (MDV), Malaysian Technology Development Corp, Cradle Fund Sdn Bhd, Malaysia Venture Capital Management Bhd (Mavcap) and Kumpulan Modal Perdana Sdn Bhd.
Revealing details of the consolidation plan, Yeo said Cradle Fund would manage grant allocation while Mavcap would be in charge of VC funds through the FoF model.
She added that MDV will handle loan disbursements to start-ups who may not be eligible to receive financial assistance from commercial banks.
“For example, a lot of renewable technology projects were given a higher interest by commercial banks and MDV will be able to support that,” she said, adding that her ministry has until January to consolidate the VCs.
Apart from cementing the means to distribute government’s financial assistance, Yeo said the Cabinet had approved the incentives for private firms or high-net-worth-individuals in VC funds to attract more investment.
The incentives, which provide deductions of up to RM20 million in income tax, allow investors to claim the tax reduction after three years of investment compared to the previous mechanism where the benefit will only materialise when the investment draws to a close.
“We want to grow Malaysian talents as currently, we don’t have much. As you grow, your financing needs to be bigger and money is just one of the reasons for start-ups such as Grab to move out of Malaysia,” Yeo said.
She also highlighted the importance of VC’s international connectivity and having a sustainable business model when it comes to choosing start-ups.
“Many people fix their eyes on Gojek and Grab, but I would say there are a lot of other start-ups that can earn profits for their shareholders.
“But what Malaysia lacks right now is exposure and accessibility to the international market. Malaysia is only a population of 30 million people.
“How do we want to become a giant in technology with 30 million population? It’s not possible,” she said.
However, Yeo said the ministry is still in the infancy stage in developing a sustainable VC and VC funds ecosystem.
“I would say it is still in infancy at this moment of how to gain momentum because we have just finished our consolidation plan and it will take six months to find ways to implement the new mandate.
“But, do we have enough good local private VCs to fund? It’s a chicken and egg situation, and that is why we need to put the money in, at the same time, building our capacity,” she said.
Rushing to Tighten the Laws
Global calls for sustainability are pushing the government to take immediate actions in strengthening the current laws and its inflicted punishment to serve justice to the culprits who are harming the environment.
In the case of Kim Kim River, the maximum fine that can be imposed on the culprit is RM500,000 and/or a five-year jail sentence while the law also forbids punishment on the landowner where open burning is situated.
“All of these activities affect thousands of people but the act only allows us to impose such punishment,” she said.
Yeo said her ministry is currently rushing to amend the Environment Quality Act 1974 and draft the proposed Transboundary Haze Act, which are hoped to be tabled to the Cabinet in 2020.
“The Environment Quality Act has been amended a few times but it still does not help with the enforcement. It is very old and it does not keep up to date with what is required at the moment.
“If I can table the Energy Efficiency and Conservation Act, the Environment Quality Act, together with the Transboundary Haze Act, whether it is within the Environment Quality or separately, including the new Antarctic Act and an act on radiation, the future will only need the dynamic of what else is needed in terms of structure,” she said.
As the complexity is in the legality itself, Yeo said the ministry recently rejected a draft of a new environment act and that her team is currently back at the drawing board to fine-tune the proposal with more uncompromising regulations.
“I had drafted a new law, but it was not good. It was rejected two months ago and we are drafting a new one. There’s no point if it can’t give good results,” she said.
While gunning for tighter laws, Yeo said the process to achieve it has not been smooth as the ministry is facing difficulties in resources and is required to take consideration of the economic impact.
“We do have a physical resource problem such as money and expertise. We need good lawyers who are not conservative. It doesn’t come easy and it takes a lot of effort and time to make this happen.
“On top of that, we still need to do a regulatory impact assessment to find out how it is going to affect the companies economically,” she said.
Leaner and Better MESTECC
Yeo is aiming for a leaner ministry to optimise the ministry’s resources.
She has also managed to minimise MESTECC’s 30 agencies down to 25 in the past year. Since taking office, Yeo has closed down the Malaysia Nuclear Power Corp, merging Malaysian Remote Sensing Agency into Angkasa and privatised other agencies.
“We are almost organisationally leaner and the organisations are more optimised now than a year ago,” she said.
She added that with the limitation of keeping her ministry’s manpower at the current number, Yeo faces an extra challenge to serve her additional mandate of climate change.
“When I first came to the ministry, the climate change division had only five people.
“We are repurposing Malaysian Green Technology Corp (GreenTech Malaysia) to become Malaysia Green Technology and Climate Change Centre, so that we can have a division that works on climate change,” she said.
After spending a year restructuring her administration, Yeo said 2020 will be the year to empower the workforce through de-bureaucratising the working system in her department.
Yeo added that many ministerial experts have been buried under the tradition of government bureaucracy, which in turn, has impeded the progress of the ministry.
“The challenge is that our people no longer dare to dream. There are a lot of government experts who are buried by bureaucracy and we are trying to de-bureaucratise them.
“I still remember in my first post-Cabinet meeting, nobody dares to say anything against me. I think our people have changed so much as I have seen the culture of people speaking up. Now I feel less of those challenges,” she said.
In Yeo’s principal, more allocation doesn’t necessarily translate into better results if one doesn’t know how to utilise it.
Having a peek at her budget allotment for 2020, Yeo said she was more than happy to know that there would be a marginal increase, which will be channelled to strengthen the Department of Environment’s equipment.
“For the upcoming budget, after seeing the numbers, it is not much of an increase. I don’t think it will be a restriction of what we want to do.
“Most of the MESTECC’s work in the power industry doesn’t need much allocation apart from the science, technology and innovation department where it needs more commercialisation of technology and more engagement with the people,” she said.