CM: No takeover as SESB costly to run
Published on: Tuesday, July 07, 2015
Kota Kinabalu: The State Government has no plan yet to take over Sabah Electricity Sdn Bhd (SESB) from Tenaga Nasional Berhad (TNB) since it is still unable to reap profit and is very expensive to run. Chief Minister Datuk Seri Musa Aman said in the last few years, SESB had been making losses of a few hundred million ringgit."Why should we take over a losing company? Not all utility company can make profit," he said, adding the situation in Sabah could not be compared to Sarawak, which has the Bakun Dam and much cheaper operating cost.ADVERTISEMENT However, with SESB remaining with the Federal government-linked company, TNB, he said it could be rest assured that the Federal Government was doing its best to improve the performance of SESB."At least the Federal Government is trying hard to improve SESB's services. If we want to take over a company it must be profitable. We may never take those that leave us with liability," he told Likas Assemblyman, Junz Wong.Debating the First Supplementary Bill (2015) at the State Legislative Assembly here Monday, Wong had asked the Chief Minister if the State Government possessed the ability and financial strength to take over SESB and run the utility business. "The utility business – water and electricity – is a very expensive business. We have to be very careful," said Musa, adding that the funds (to take over SESB) could be used to do more beneficial programmes for the people.ADVERTISEMENT Wong in thanking Musa for his immediate reaction to the query proceeded with the debate claiming that the reason for SESB not making money was due to the "lopsided IPP (Independent Power Producing Plants) contracts." He said that 71 per cent of SESB revenue went to the IPPs, therefore SESB could hardly make profits while Sabahans have to suffer expensive electricity tariffs."If SESB was already making super good profits, will TNB still sell SESB back to us then? At what price? So we have to work out a strategic plan now how to take over SESB in the near future."
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"We must understand that SESB has the social responsibility to ensure reasonable electricity tariffs so we cannot think about profit only," said Wong.Wong also said that if the State Government does not have sufficient funds the Federal Government could give grants or soft loans to take over and build more power plants. He claimed that most if not all of TNB investments into SESB was through a form of Federal grants. "So I see no reason why Federal Government can give grants to TNB but cannot give similar grants to the Sabah State Government to run SESB," said Wong. Wong also asked on the status of the proposed 150mw Ulu Padas Hydro Power Plant seeking assurance from the Chief Minister that it would be owned jointly by SESB and the State Government. Wong was informed that the Federal government has approved a soft loan of RM569 million for the hydro power plant while the proposed structure was supposed to be SESB 80 per cent and the State Government 20 per cent but the decision has to come from the Federal Government. "However, the decision has been deferred since early 2015 when the Federal Cabinet was supposed to give an answer because all the relevant studies have been carried out and briefed thoroughly."At this juncture, Musa intercepted and assured that the State Cabinet has decided that State Government should own at least 40 per cent share and 40 per cent to SESB in the Hydro Power Plant although this would have to be decided by the Federal Government. Wong then proceeded asking Deputy Chief Minister Tan Sri Joseph Pairin Kitingan who is Infrastructure Development Minister to talk to the Federal Minister in charge, Datuk Seri Dr Maximus Ongkili. "So hopefully Tan Sri Timbalan Ketua Menteri can talk to his federal minister and help to secure the best deal for Sabah," said Wong.Pairin interjected and reassured Wong that the Sabah Government has the best interests of Sabah at heart. "As the Chief Minister has explained, we are already moving towards that direction but we don't talk much. We are also trying to get all the IPPs if possible but there is no need to be too anxious," Pairin told Wong.Stay up-to-date by following Daily Express’s Telegram channel.
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Wong denied he was being anxious but raising the issue because he was thinking about the high electricity bills that Sabahans have to pay."Thank you for the assurance," he said.