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Reveal how much IPPs paid, max told
Published on: Wednesday, January 03, 2018

Kota Kinabalu: Opposition Warisan Sabah said Sabah Electricity Sdn Bhd (SESB) should be making good profits if not for mismanagement, including lop-sided deals, and challenged Minister Datuk Seri Dr Maximus J. Ongkili to disclose how much profit every IPP had earned for the past four years.

"List them down one by one for the past four years from 2014-2017 and the profit after tax (before I do)," Warisan Vice-President Junz Wong said in a statement, Tuesday.

"Let me remind Dr Maximus (Energy, Green Technology and Water Minister) that SESB is a company which can easily generate a good revenue of 1.5 billion a year.

"SESB recorded RM1,427,693,000 in 2013 financial year but declared profit after tax was only RM13,861,000 which is less than 1pc of the revenue!," he said.

Junz was commenting on a statement by Dr Maximus of on-going discussions with the Ministry of Finance and Tenaga Nasional Berhad (TNB) on the future of SESB especially since SESB continued to make losses and was on the verge of insolvency.

Junz who is also Likas Assemblyman said major reasons behind SESB's unhealthy financial position are the Independent Power Plant lopsided deals.

"SESB has to pay a minimum capacity payment in millions to all IPPs even though SESB doesn't need any unit from IPPs due to sufficient reserve margin of power.

"IPPs comprise roughly 71 per cent of total SESB costs. In other words, the 'Rakyat' is paying expensive electricity bills to enrich IPP cronies. It is the high IPP composition of SESB costing which has caused low electricity production and efficiency, and now the so-called SESB insolvency risk."

Junz said there was even "a silly statement by State Infrastructure Development Minister Tan Sri Joseph Pairin Kitingan that more IPPs would actually resolve electricity disruption" and "another stupid statement by Dr Maximus that more grant of 2.3 billion to be given to SESB when IPPs would indirectly benefit from all these grants and they know it".

With such huge revenue collected, he questioned how SESB could face the risk of insolvency.

"In 2012, SESB was given a federal grant of RM80 million to transfer two 33MW turbine generators to Tawau now known as the Kubota Tawau power plant," he said, and alleged that second hand turbines from Langkawi were transferred to Sabah as a short term measure before the proposed 300MW geothermal plant was to be constructed, while SESB had to bear the federal grant of RM80 million."

"The geothermal plant remains a dream too good to be true," Junz said.

He also alleged that SESB bought two disposed generators from TNB at a staggering price of approximately RM59 million back in 2015 when a new 33MW same capacity type of turbine generator cost less than RM15 million.

(Price may differ as it depends on the impact of our continuous falling ringgit).

He claimed SESB had initially rejected that offer and paid RM59 million for the two second hand turbines that Langkawi didn't want.

Junz also alleged that a RM17 million yearly maintenance agreement was given to a SESB subsidiary for two 33 MW generators @ Kubota plant, Tawau.

"It's essential for Sabah to be controlling own power sectors via SESB to ensure Sabahans will not have to pay for unreasonable electricity tariffs therefore SESB should be major shareholder in Ulu Padas Hydro Plant so that Sabah could be given more control in managing its electricity supply and rate.

"Do not forget that Sarawak managed to reduce their tariff by 40 per cent when the petrol prices come down but Sabah and the peninsula could not do it.

"Simply because there is no independent power plants (IPPs) in Sarawak and all power plants are run by the state owned utility company in Sarawak," he said.

He believed that the TNB subsidiary was also awarded the consultation contract for SESB but not a registered consultation company and do not have the expertise to consult on the technical matters.

Junz said a Warisan State Government Government will make move to take back SESB and revamp to run this utility service with social responsibility to stop TNB's exploitation as well as to curb all leakages, wastage and rectify lopsided deals.

"Most if not all of TNB investments into SESB was through a form of federal govt grants so i see no reason why Federal Govt could give grants to TNB but not to the Sabah Govt to run SESB.

"Warisan Sabah will also set up a Sabah Energy Commission and having our own energy body is in line with the aspirations of Sabahans to chart our own path.

Among the objectives are:

- Review and do away with Independent Power Producing Plants (IPPs) private contracts

- Ensure SESB own more future power plants

- Curb leakages & cut wastage aim to reduce electricity tariff and enhance service efficiency," he said.

"Warisan will be holding forums statewide to explain on Warisan plan to revamp SESB to resolve her internal problems and implement new policies to directly benefit the people of Sabah," he said.

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