12:08 pm - Tuesday January 23, 2018

Minister: SESB will not be shut down

SABAH

MO,11/1/2018, SABAH government has assured that Sabah Electricity Sdn Bhd (SESB) will not be shut down and that only the state has the right to review electricity tariff. State Industrial Development Minister Datuk Seri Raymond Tan Shu Kiah said the government would find possible solutions for the utility company, which was reportedly on the verge of insolvency.

“The state government had, last week, responded to Tenaga Nasional Bhd (TNB) on increasing the government’s shares in SESB. “We had offered to buy 10 per cent for the Kota Kinabalu Industrial park (KKIP) Sdn Bhd, which is a licensed (Independent Power Producer) with a good record of the System Average Interruption Duration Index (Saidi) of less than 100,” he said, adding that negotiations between the state government and TNB were ongoing.

TNB owns 82.75 per cent of SESB, while the state government holds the remaining stake. Tan, who is also deputy chief minister, said this after witnessing the signing of the offtake agreement between Cement Industries (Sabah) Sdn Bhd and Ecocoils Sdn Bhd here recently, which will facilitate the infrastructure industry to maintain a healthy level of development and minimise negative impact on the environment.

On the electricity tariff review, which was last made and approved by state cabinet in 2014, Tan said the state had the right to decide on it according to the constitution. Tan added that based on financial statements, SESB had also been recording profits since 2014 until August last year. “The tariff is supposed to be maintained at the same rate. or reduced as more than 80 per cent of power generation is through natural gas obtained from the state.

“In 1990, when the federal government, via Petroliam Nasional Bhd, took over oil and gas offshore assets, there was an agreement that natural gas would be sold to the people of Sabah at a special price. “It does not make sense when natural gas is used for power generation, but it is announced that the power-generation cost had increased to 56.50 sen/kilowatt per hour (kWh) when it was 31.11 sen/kWh during the last review in 2014,” he said, adding that the natural gas plants are slowly replacing old diesel and medium fuel oil plants.

Tan said the government was looking at utilities as a serious matter reassure the people of Sabah, and build confidence among investors.

Filed in: Nasional, Negeri Di Bawah Bayu, Topik Pilihan

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