Awang Tengah slams Chong

By Simon Peter

KUCHING, May 13, 2014: Sarawak's electricity supply is projected to increase to 4,223MW by 2020, from the present 2,286MW, Public Utilities Minister Awang Tengah Ali Hasan said yesterday.

Major developments currently being undertaken in the power sector for the generation and transmission systems include: 

- full operation of eight generating units of Bakun HEP;

- 944MW Murum HEP expected to begin generating power in fourth quarter of this year;

- construction of 600MW Balingian coal plant commencing this year;

- on-going pre-engineering studies for Baleh and Baram HEPs;

- on-going pre-engineering studies for additional thermal plants;

- the construction of 600km second backbone 500kV transmission lines expected to be completed in 2016; and 

- the construction and expansion of extra high-voltage sub-stations at Tada, Similajau, Samalaju, Entinggan, and Matang are on-going and expected to be completed in 2016.

"All these projects when fully completed will enhance the State Grid System to ensure adequate, secure and reliable power for the customers," Awang Tengah said when replying to points raised during the debate on the Governor's Royal Address.

He described the reasons given by the Sarawak DAP in its signature campaign to reduce electricity tariffs absurdities.

"I cannot help but conclude that the signature campaign by DAP for electricity tariff reduction and other misleading attacks on SEB are aimed at sabotaging the successful implementation of the State’s economic development agenda," he said.

He said that the DAP has persistently refused to acknowledge:  

(1) that Sarawak already has, and will continue to have, the cheapest electricity tariff in Malaysia.

(2) that there is no subsidy from ordinary customers to SCORE investors.

(3) that every job created, when a SCORE investor buys electricity from SEB, validates the Governments’ policies for the development of the State for the people.

(4) that all of the energy from Bakun and Murum has already been taken up.

(5) that SEB with about 4,000 proud Sarawakians are benefiting from the technology transfer.

 He said in the past few years SEB has been serious in tackling power theft. On the other hand, DAP has relentlessly attacked and questioned the actions taken by SEB. Though they repeatedly said that they do not condone power theft, their actions reflect otherwise.

 "About 90% of customers in Sarawak do not steal power. This leaves the remaining 10% if the DAP wishes to champion, if they wish to. In addition, SEB has taken court action against power thieves and so far won all the cases.

"The DAP has always propagated in the minds of the rakyat that our electricity tariff is the highest in the nation. Thus they launched this campaign.

"Despite repeated factual explanations in this Dewan over the past years, DAP is still in denial or

pretending not to understand the fact that we have lower electricity tariff than Peninsular Malaysia since 2009 and is now one of the lowest in the region.

"The average selling price of electricity for Sarawak is 29.8 sen/kWh. This is 30% lower compared to TNB’s 38.5 sen/kWh. The State Government’s strategy in utilising hydro resources has stabilized the electricity tariff.

 "On the other hand, the DAP now attempts to reason by saying that Sarawakians have paid high tariff in the past, and they should therefore now pay lower tariff. This does not make sense.

"Compared to the State’s consumer price index increase of 58% from 1992 to 2013, the State’s electricity tariff has instead, remained stable. Even now with increase in the cost of producing and supplying electricity, the tariff has remained the same. As such, it is illogical to reduce the tariff as championed by DAP.

"The tariff reduction campaign by DAP is appealing to the people, but is actually destructive in the

long term.

" In addition to having the lowest tariff in the country, domestic consumers in Sarawak who consume below 100 units per month are also enjoying 10 sen/kWh discount by SEB.

"This is on top of the Government’s assistance of free electricity for those consuming RM20.00 and below per month. About 60,000 to 70,000 domestic consumers are benefiting from this assistance. This represents more than 10% of the total domestic consumers," Awang Tengah said.

He accused the DAP of misleading the people that the 30% electricity tariff reduction will not impact SESCO.

"That we know will correspondingly reduce the revenue of SESCO by 30%. This is not merely rhetoric. The figures can easily be calculated based on 2012 figures used by DAP.

"SESCO’s revenue derived from organic customers was RM1.6 billion. If the tariff is reduced by 30%, even DAP can do the simple arithmetic that SESCO’s revenue will be reduced by RM480 million.

"SESCO’s profit in 2012 was RM266 million. Not only SESCO’s profit will be wiped out, SESCO would have had a deficit, and I mean actual loss of more than RM200 million in 2012 if DAP’s proposal had been implemented.

"SESCO could have gone bankrupt and a lot of employees will lose their jobs and that will affect the economic development of the State," he said.

 He said that SEB needs to be financially strong to fulfil its obligations and to ensure the success of the State’s Sarawak Corridor of Renewable Energy (SCORE) agenda.

He added that the comical electricity tariff reduction championed by the DAP will definitely be detrimental to the State by jeopardising the State’s economy and denying it from achieving a developed status by the year 2020 and impeding the opportunity for development to reach the interiors.

He said it will also be depriving the people of Sarawak from achieving high income and better living standards.

 "I am proud, and all Sarawakians should be proud, of SEB’s sound financial performance. It shows that SEB is well-managed and has the capacity to shoulder the Government’s development plans for the benefit of the rakyat," he said.

On the DAP's claim to have integrity in their signature campaign, Awang Tengah said that this is far from the truth.

"They are instead deceitful and changed their stance to suit the situation to their advantage.

"When the State embarked to develop hydro projects such as Bakun, Murum and other dams, the DAP persistently opposed. They reasoned that there would be excess capacity for local demand.

"They refused to acknowledge large demands from investors setting up their energy intensive industries in SCORE areas. But the State Government remained steadfast that hydro development, besides ensuring the success of the broader SCORE agenda, will contribute towards electricity tariff stabilization for local consumers.

"This strategy in hydropower investment has shielded the State from the forces of rising fossil fuel prices that are skyrocketing electricity tariff globally.

"The State has been successful in attracting industries that are energy and capital intensive, not only foreign, but also local, by providing wholesale pricing of bulk energy. There are now 12 SCORE customers committed to take up 20,000GWh or ten-fold the present local industrial consumptions.

"Each SCORE customer on average consumes 800 times more than each local industrial customer. Thus, electricity tariff for bulk customers is competitive. I would like to make it clear in this Dewan that there is no subsidy for SCORE customers.

"Bulk energy for SCORE customers was priced without increasing electricity tariff for local consumers," he said.

He added that SEB has taken measures to ensure continuous improvements and reliability of power supply.

These include investment of a sum of RM7.7 billion for the upgrading and improvements of Sarawak’s generation, transmission and distribution systems between 2009-2013, another RM8 billion for the upgrading and improvement of the generation, transmission and distribution systems planned for implementation between 2014-2018 and doubling the length of transmission network that includes the 500kV State Transmission Backbone project.

He said SEB needs to be financially strong to sustain its operational improvement. If revenue were to be slashed by 30%, resulting in financial deficit, SEB will not be able to undertake system improvements, maintenance and upgrading works.