FSI says surprised over statement on SESB

KOTA KINABALU: The Federation of Sabah Industries (FSI), representing more than 200 public listed companies to small and medium enterprises, was taken aback by the report that sole electricity supplier, Sabah Electricity Sdn Bhd (SESB) was on the verge of insolvency as electricity constitutes a major cost of production.

FSI president Datuk Mohd Basri Abd Gafar said he was disappointed as he recalled that the industrial, commercial and residential tariff rates supplied by SESB were increased in January 1, 2014, following the last tariff revision in 2011.

At the last revision, the industrial tariff increased by 17.2 per cent or 5.00 sen per kWh, the commercial tariff increased by 17.6 per cent or 5.83 sen/kWh and the domestic tariff increased by 15.5 per cent or 3.98 sen/kWh, that should improve SESB's revenue and profitability, he said.

Mohd Basri said that businesses were burdened with rising costs from Goods and Services Tax (GST) compliance, labour levy, minimum wage, currency exchange fluctuation, and the impending EIS, need not be surprised by another hike of electricity tariff rates, when SESB's servicesw had not improved.

“At our last meeting with the Energy Commission, which is a statutory body established under the Energy Commission Act 2001, regulating the energy sector, specifically the electricy supply and piped gas supply industries in Peninsular Malaysia and Sabah, it was promised that Sabah's System Average Interruption Duration Index (SAIDI) was to be reduced to 100 minutes from more than 311 minutes in 2016 when compared to Peninsular Malaysia's SAIDI of less than 30 minutes,” he said of the electricity supply reliability.

“SESB must justify its performance, which is not satisfactory, and explained how this situation happened. Was it because power had been stolen, which would lead to more tariff rates increase or were there any issues with the management of the company? There were many complaints of power outages,” Mohd Basri said, adding that SESB had to improve as electricity constitutes 20 to 30 per cent of the costsof production besides raw materials, labour etc.

“Electricity is a major energy cost, up to 30 per cent for steel and cement plant production,” he said, calling for SESB to reassure customers and to give confidence to businesses with good services.