Mismanagement reason for SESB financial debacle, claims Junz

KOTA KINABALU: Parti Warisan Sabah (Warisan) vice president Junz Wong, has taken Energy, Green Technology and Water Minister Datuk Seri Panglima Dr Maximus Johnity Ongkili to task for ‘painting a wrong picture’ regarding Sabah Electricity Sdn Bhd’s (SESB) current financial position.

The Likas assemblyman contended that Maximus had made a wrong move when he announced that SESB was facing insolvency problem as the real reason behind the whole financial debacle was the fact that SESB had been mismanaged.

“SESB could have been a good profit making entity but it is being put in a bad financial position due to the many lopsided deals, which had exploited SESB at the expense of the people of Sabah in the form of high electricity tariffs as well as leakages and wastages,” Junz said in a statement.

Junz reiterated the fact that SESB is a company that could easily generate good revenue of RM1.5 billion a year.

He claimed that SESB had recorded a total revenue of RM1,427,693,000 in 2013 but declared profit after tax of only RM13,861,000, which is less than 1% of the revenue.

Junz cited the lopsided deals with the Independent Power Producers IPPs) as one the main factors that had triggered the downfall of SESB’s financial position.

“SESB has to pay a minimum capacity payment totaling millions to all IPPs even though SESB doesn’t need any units from the IPPs due to sufficient power reserve margin.

“The IPPs comprise roughly 71% of the total of SESB’s costs. In other words, the people have been paying expensive electricity bills to enrich the IPP’s cronies.

“It is the high IPP composition of SESB’s costing which has caused low electricity production and efficiency, and now referred to as the so-called SESB insolvency risk,” Junz claimed, adding that Maximus should reveal the details of the profits earned by SESB and the IPPs for the past three years.

Commenting on the issue of lopsided deals, Junz cited the Kubota power plant in Tawau as an example.

“In 2012, SESB was given a federal grant of RM80 million to transfer two 33MW turbine generators to Tawau (now known as the Kubota Tawau power plant).

“What (actually) happened was that Tenaga Nasional Berhad (TNB) arm-twisted SESB and sold second-hand turbines (disposed) from Langkawi to SESB and transferred them to Sabah, as a short-term measure before the proposed 300MW geothermal plant was to be constructed, while SESB had to bear the federal grant of RM80 million,” he said.

Junz claimed that SESB was offered an unfair deal to buy the two disposed generators from TNB at a staggering price of approximately RM59 million back in 2015 when a new 33MW same capacity type of turbine generator will only cost us less than RM15 million.

“If Warisan manages to form the state government, it will revamp SESB, to prevent further TNB exploitation besides curbing any leakages, wastages and lopsided deals,” Junz said.

“Warisan Sabah will set up a Sabah Energy Commission. Having our own energy body is in line with the aspirations of Sabahans to chart our own path,” he stressed.