Deputy Chief Minister Raymond Tan disputes claim that utility company SESB is on the verge of insolvency, citing yearly profits since the last review in 2014.
KOTA KINABALU: The Sabah government will not allow another review of the electricity tariff in the state despite claims that the exercise is needed to address Sabah Electricity Sdn Bhd’s (SESB) financial woes.
Deputy Chief Minister Raymond Tan said neither Tenaga Nasional Bhd (TNB), SESB nor Energy, Green Technology and Water Minister Maximus Ongkili, who had made the claim, had the right to decide on the matter as it concerned the state’s constitutional rights.
The industrial development minister said the state cabinet had allowed two reviews in 2011 and 2014, which had seen SESB consistently making profits ever since.
“No worries if SESB is having insolvency, cash problems… we will look into it, but they cannot simply decide on the tariff. Not even the minister.
“I don’t think the state will be reviewing the tariff regardless of the statements from SESB and the minister,” he said during a press conference here today.
According to the SESB financial report published on the TNB website, Tan said SESB had been making profits in 2014 (RM96.7 million), 2015 (RM98.7 million), 2016 (RM128.7 million) and 2017 (RM44.7 million).
He said this proved that the company was not in financial trouble despite the reduced profit last year, and that there was no reason for any exercise to review the tariff.
He added that the profits should be used for the benefit of Sabahans, which meant any plan to review the tariff should be to reduce it, not increase it.
“Whatever their reason, the state government will not allow a review of tariff, not even six months from now, because the numbers are in the black,” he said.
He said TNB’s excuse that the cost of power generation had gone up to 56.50 sen/kwH did not hold water as 88% of power generation in Sabah used natural gas.
He added that outdated diesel power plants and medium fuel oil plants were being phased out in favour of natural gas power plants.
These types of power plants, he said, used subsidised oil from the federal government. However, the amount of subsidies had decreased over the years as more and more of them were retired.
“The federal government does not subsidise natural gas because we own the gas which we get from Petronas at a special rate. So where is the problem?” he said.
According to Tan, the state government was looking into the matter seriously, especially why, even when making money, SESB was said to be on the brink of insolvency.
Tan said it was also important to assure Sabahans that SESB could not shut down because this would mean a blackout.
On Dec 22, Ongkili had said that the utility company was continuing to make losses and was on the verge of insolvency.
He said it had been asking for a tariff revision since its last review in 2014.
Commenting on the issue of supply and distribution of electricity, Tan said it was the state’s constitutional right to be allowed to do as Sarawak did.
Any utility company can operate in Sabah, he said, but the right to regulate belonged only to the state government.
“It was former prime minister Dr Mahathir Mohamad who decided to stop Sabah in 1983, although he didn’t stop Sarawak. I have raised this issue before, but Mahathir didn’t respond. Maybe he was busy with his new party, scheming how he can become the prime minister again.
“Mahathir never agreed on anything we said is the state’s right. It gave us problems. Now we are telling the current Prime Minister Najib Razak that this is the state’s right and to let us decide. We will see what happens next.”
Tan said the state government was also considering increasing its shareholding in SESB through KKIP Power, which has been operating since 1999.
The company, he said, had assets within the KKIP area worth up to RM200 million and boasted Saidi rates of below 100.
Saidi is the average outage duration for each customer served.
“Last week we wrote to TNB saying that we can increase our share. Tell us how we can engage in this negotiation. How to get into the process. But I assure that everything will be transparent. If they’re facing problems, the state will help.
“This is to give assurance not just to investors but to the people of Sabah. SESB cannot shut down.
“We don’t care what TNB or the minister said, they have no right. This is the state’s right, and any decision will be approved by the state because this concerns the people and their welfare,” he said. - FMT
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