SESB sacrifices for the sake of power in Sabah

KUALA LUMPUR: Sabah Electricity Sdn Bhd (SESB) is reeling under financial strains due to government’s clampdown on tariff, huge investments and higher operating costs as it is providing power to more than 80 per cent of the state.

Tariff increase had not been implemented until 2011 although SESB was allowed to do so three times earlier in accordance with the privatisation of the Sabah Electricity Board’s (SEB) in 1998.

“The privatisation agreement stipulated Tenaga Nasional Bhd’s (TNB) endorsement for tariff increases by 28 per cent in 1999, 20 per cent in 2004 and 3.58 per cent in 2008, but the three rate hikes were never implemented,” according to a source.

Under the privatisation formulated 17 years ago, TNB owns 80 per cent of the equity in SESB while the remaining 20 per cent is held by the Sabah government.

Sabah decided to privatise SEB as it was in poor financial health to expand the electrification expansion in the state beyond 50 per cent then.

Thus, TNB shouldered a big responsibility to ensure the state government’s resolve could be carried out in the interest of Sabahans and Sabah, whose geographical terrains posed a big challenge.

From the records, once SESB was created, TNB gave a capital injection of RM857 million in 1998 and the financial aid kept rising. — Bernama