SESB on verge on insolvency
KOTA KINABALU: The future of Sabah Electricity Sdn Bhd (SESB) will be determined following an ongoing discussion between the Energy, Green Technology and Water Ministry (KeTTHA), Ministry of Finance (MoF) and Tenaga Nasional Berhad (TNB).
“The discussion is crucial, especially since SESB continues to make losses and on the verge of insolvency,” said KeTTHA Minister Datuk Seri Dr Maximus Ongkili in a statement yesterday.
TNB owns 82.75 per cent of SESB, while the rest of the stake is held by the Sabah State Government.
“SESB's current average tariff is 34.52 cents/kwh while cost of energy generation is 56.50 cents/kwh. Hence, the Federal Government has been subsidising SESB's fuel costs, ie primarily diesel, medium fuel oil (MFO) and gas,” Maximus said, adding the Federal Government has also been providing the bulk of SESB's capital expenditure.
Since 2012, RM4.2 billion has been spent by the Federal Government to boost SESB's operation, and that both TNB and SESB have also spent their portion on capex expenditure.
For the period between 2016 and 2019, the Federal Government has also allocated RM2.3 billion for capex and reducing System Average Interruption Duration Index (SAIDI).
Maximus added that through these efforts, the SAIDI in Sabah had been reduced from 777 minutes/customer/year in 2014 to 311 last year, and expected to be further reduced to 280 by year end.
SESB also has been asking for tariff revision since its last review in 2014, but it is also the Federal Government's duty to ensure tariff is fair and affordable to consumers.
“We also want to ensure that the tariff revision is reflective of the quality of power delivered,” he said in responding to the comments by TNB chief executive officer Datuk Seri Azman Mohd.
Azman disclosed that they are discussing on the future of SESB and an agreement is expected by the new year to determine the best option.