Lopsided power deal squeezing Sabahans

Are Sabahans forced to pay higher electricity rates to offset a lopsided deal the state government has with IPP?

KOTA KINABALU: The Sabah Barisan Nasional (BN) government has been accused of perpetually enriching the Independent Power Producer (IPP) in the state through a lopsided agreement with them.

Kota Kinabalu MP, Hiew King Cheu, said that Sabah Electricity Sdn Bhd (SESB) is required to compensate the IPP if the daily consumption by SESB is less than RM3 million.

This agreement is for a period of 25 years, he said.

“How can we have a contract whereby the IPP is guaranteed a minimum electricity consumption by the state of RM3 million per day? If it doesn’t reach that amount, then the government will have to top up.

“If this is true that means the agreement is lopsided and purposely made to benefit the IPP only. It is a lucrative business with guaranteed profit.

“Maybe this partially explains why we have a 15% power tariff increase so as to enable the SESB to help top up the difference to bring the sum to RM3 million per day in order not to pay compensation.”

Demanding an explanation from SESB, and the federal and state governments, Hiew said “it is money from the consumers’ pocket”.

‘We need some answers’

Energy, Green Technology and Water Minister Peter Chin, in explaining the hike in power tariff in the state, had said that in spite of the allocation of RM2.872 billion and subsidy of RM2.663 billion to SESB over the past 15 years, the SESB was still losing RM0.062 per kilowatt hour.

But Hiew said that if the IPP’s minimum receipt per day is guaranteed by the government “that means we shall have to pay higher electricity tariff to meet the shortfall”.

“Now the SESB has openly appealed to the public to save on electricity usage, and that means the shortfall will be even greater.

“The IPP definitely has no problem, but the government will have to pay through its nose. In the end, the consumers suffer,” he said.

He added: “The management of our electricity supply had been in a very poor state for the past 50 years.

“Why hasn’t the government found a solution to overcome this once and for all? We need some answers.”

Consumers in Sabah are upset about the 15% increase in the power tariff, which was recently jointly announced by State Industrial Development Minister Raymond Tan and Chin in Kota Kinabalu.

On the claim that the increase in the tariff is aimed at cutting subsidy and helping the government save money, Hiew said: “The BN government is actually squeezing more money from the people.”