Power hikes ‘unjustified’

Various Sabah industries are unhappy with the government's unilateral decision to increase electricity rates.

KOTA KINABALU: Manufacturers in the timber sector and timber-related industries in Sabah want the government to reconsider its decision to increase the power tariff by 15% effective July 15.

Sabah Timber Industries Association (STIA) said its members are troubled by the unwarranted hike in rates in a state that is already at an economic and trading disadvantage with other parts of the country.

STIA secretary Stephen Chaw said its members, comprising mainly manufacturers of timber-based products, would be greatly affected by the move in view of the frequent power interruption and shortage in Sabah.

STIA members also felt that the factors leading to the decision to increase the rate by the government were not justifiable.

Chaw said that over the years Sabah manufacturers had suffered the most in terms of power disruption and shortage of power supply unlike manufactures in other states in the country.

“The association appeals to the government to reconsider its decision and take the initiative to meet the end-users, particularly the timber manufacturers, to evaluate the power supply situation in Sabah to work out long-term solutions,” Chaw said yesterday.

According to Chaw, the Sabah Electricity Sdn Bhd (SESB) should be responsible for extending uninterrupted and high quality service to consumers before deciding to restructure the current tariff rate.

He said the association has in the past highlighted the various problems faced by its members, particularly in the Sandakan area “where power interruption is a daily affair”.

“It is therefore unjustified for the government to unilaterally increase the tariff without prior consultation with the industry in its effort to resolve the problems.

“It must address the current outstanding issues of frequent power interruption and shortage,” Chaw said.

He added that any increase in costs will have a chain effect and will subsequently increase the cost of living in Sabah.

“It is anticipated that the lower income group will be badly affected,” Chaw added.

Frequent power outages

Another group which is also concerned about the hike is the Federation of Chinese Associations Sabah (FCAS).

Its president, Sari Nuar, urged the SESB to ensure the commercial and industrial sectors are given uninterrupted power supply.

He pointed out that power outages would paralyse the output of the sectors and directly affect their unit cost of production.

“The complaints by the processing factories on their losses due to power outage must be looked into seriously and some reasonable formula on compensation must be given to the consumers due to power stoppage.

“The 15% increase would affect the higher power consumers such as commercial buildings with air-conditioners and factories with high-powered processing machinery.

“Therefore, the commercial and manufacturing costs would have to factor in the additional costs,” he added.

Last Saturday, Energy, Green Technology and Water Minister Peter Chin announced the tariff restructuring, saying that it was necessary to reduce the gap between the cost of electricity supply and tariff.

He said that the move will allow SESB to provide uninterrupted electricity supply in Sabah and Labuan.

The electricity tariff in Sabah has been constant for 25 years, whereas Labuan’s tariff is based on the Tenaga Nasional Bhd (TNB) electricity tariff for industrial and commercial sectors since 1994.

With the restructuring, the average electricity tariff in Sabah and Labuan will be increased by 3.75 sen per kilowatt (kWh) from 25.50 sen/kWh to 29.25 sen/kWh, or 15%, he said.

Not affected

Meawnhile, two other association seemed unperturbed by the move to increase electricty rates.

Both the Federation of Sabah Manufacturers (FSM) and the Sabah Hotel Association (SHA) are not worried about the hike.

FSM president Wong Khen Thau said the restructuring was acceptable to the federation members as the tariff rate hike was not substantial.

He said 75% of the users would not be affected and only heavy users would experience an increase in their bills.

“Although the restructuring in electricity tariff will affect some of the manufacturers, the SESB will offer businesses special packages such as peak and off-peak rates, as well as rebates in using energy-saving machinery,” Wong said.

He added that FSM had about 200 members and up to 80% are involved in small- and medium-scale industries.

SHA president Christopher Chan said it members were not perturbed because “our industry has always been practising energy-efficiency and conservation, so energy cost has not been a major cost in our operation.”