Over the weekend, the Real Estate and Housing Developers' Association of Malaysia (REHDA) joined the chorus for reduced electric tariffs. President Ng Seing Liong reportedly said the move was “essential for them to ease their burden in terms of doing business.”
Really, how much of the cost of a house is due to power tariffs? 5% at most? So, even if power tariffs are cut by 20% as REHDA requests, developers' costs will go down 1%. Do you think the savings will come to you and me, the housebuyers? Or will the developers happily pocket the savings as extra profit?
Power in Malaysia is already very cheap – far cheaper than in Singapore, for example. And yet, in Singapore, which its government admits will be in recession this year, no-one is clamouring for cheap power. It is accepted that power is a product for which a fair price has to be paid. Instead, the Singapore government is working on various stimulus packages to help the local economy along.
Back home here in Malaysia, far greater savings could be made if productivity were improved. Take a look at any property development site. Look at the wastage in materials and the inefficient working practices. If REHDA and its members focused on this instead, I'm sure they could find 1% of cost savings. And on the government side, cutting red-tape and smoothening implementation will help developers cut costs too, if they no longer have to employ runners and “consultants” to keep things moving.
Cheap power does not benefit the average Malaysian, and will kill our economic competitiveness. All this focus on cheap power detracts from the real issue – the biggest savings and gains are to be made if the BN government practices Competency, Accountability and Transparency.