Kota Kinabalu: Sabah is not in a position to support data centre investments at the moment due to limitations in water and electricity supply, said Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe.
Responding to questions from Senallang Assemblyman Datuk Seri Mohd Shafie Apdal and Moyog Assemblyman Datuk Darrel Leiking, Phoong said while the state welcomes investment, certain high-demand industries are being approached with caution.
“We are being careful when it comes to approving investments that use a large amount of electricity and water. For example, the recently reported data centre project – we cannot support it at this time because of its high resource requirements,” he said during the State Legislative Assembly sitting on Tuesday.
Phoong also said that even more developed states like Johor had taken a step back on data centre proposals due to the limited economic benefits they provide.
“Even in Johor, they held off for a while. From a broader perspective, data centres don’t necessarily benefit the country much. They offer very low employment opportunities and the economic spillover is limited,” he said.
Earlier, Darrel had urged the state to look beyond short-term constraints and think strategically about Sabah’s location and resources.
“Sabah has a lot of water. If Sarawak can support data centres, why can’t we? The east coast of Sabah is well placed to serve markets in the Philippines, Sulawesi, Papua New Guinea, Australia, and New Zealand,” said Darell earlier.
Shafie Apdal also raised a follow-up question on whether the state’s infrastructure is currently sufficient to meet industrial needs, especially in key industrial zones such as KKIP (Kota Kinabalu Industrial Park), SOGIP (Sipitang Oil and Gas Industrial Park), and POIC (Palm Oil Industrial Cluster) in Lahad Datu.
“That’s an example of why we must have detailed and proper planning for future development,” he said.
“I’m asking if these industries already have enough water and electricity — not just at KKIP, but also in Lahad Datu and SOGIP. Yes, they can use generators, but is the supply really enough?
“If yes, how much are they being supplied — in megawatts, for example? And about the seawater desalination project, is it enough? In other places like Dubai, Singapore, and the Middle East, they use this not only for industrial use but also for drinking water,” he asked.
Phoong responded that detailed figures — such as megawatt capacity and supply volume — would be provided separately, but assured that the ministry is doing its best to support existing industrial parks.
“We are doing our best to assist these industrial parks, but we also need to be cautious when approving projects that might overload the system,” he said.
