SESB to know fate after discussions among key stakeholders

KUALA LUMPUR: The way forward for Sabah Electricity Sdn Bhd (SESB) will be determined by the outcome of ongoing discussions among the Energy, Green Technology and Water Ministry, Finance Ministry and Tenaga Nasional Bhd (TNB).

This follows TNB’s announcement of its intention to dispose of a partial or its whole 82.75 per cent stake in SESB. The Sabah government holds the remaining stake.

“The discussion is crucial, especially since SESB continues to make losses and is on the verge of insolvency,” said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili in a statement yesterday.

“SESB’s current average tariff is 34.52 sen per kilowatt hour (kwh) while cost of energy generation is 56.50 sen per kwh. Hence, the federal government has been subsidising SESB’s fuel costs — primarily diesel, medium fuel oil and gas,” said Ongkili, adding that the federal government had also been providing the bulk of SESB’s capital expenditure.

Since 2012, RM4.2 million has been spent to boost SESB’s operation.

Meanwhile, Ongkili said the System Average Interruption Duration Index (SAIDI), a system index that measures the average duration of interruption in the power supply indicated in minutes per customer, had been reduced from 777 minutes per customer in 2014 to 311 minutes last year, and expected to be further reduced to 280 minutes by yearend.

SESB has been asking for tariff revision since the last review in 2014 and the minister said it was the federal government’s duty to ensure tariff was fair to consumers.

“We want to ensure that the tariff revision is reflective of the quality of power delivered,” said Ongkili in response to comments by TNB chief executive officer Datuk Seri Azman Mohd.

Earlier, Azman had disclosed that an agreement on the future of SESB could be expected by the new year.

It was reported on Tuesday that TNB was mulling over the disposal of its stake in SESB, either partial or the entirety.

“We are discussing the matter with the Energy, Green Technology and Water Ministry and the Energy Commission.”

“I think it is time we reviewed the situation. We are still in discussions with the other parties and hopefully, we will come to an agreement next year on what is the best option to take,” said Azman after the company’s annual general meeting.