TNB deal in Sabah raises eyebrows

Why is Sabah Electricity Sdn Bhd paying a TNB subsidiary
RM18 million annually for routine services when it can
do the job itself?

TAWAU: The yearly payment of RM18 million to a subsidiary of national utility company Tenaga National Bhd for routine services of a power station in Sabah has come under the spotlight.

Sabah DAP chairman Jimmy Wong said state utility company, Sabah Electricity Sdn Bhd, which is itself a subsidiary of TNB, must explain the rationale for the multi-million ringgit bill for maintenance checks by TNB Remaco on the Kubota Power Plant at Taman Millennium.

Wong said SESB should be able to handle the routine task without having to engage TNB Remaco for the job as has been done in the past.

“The RM18 million is only used to conduct routine operation and service. Any major breakdown is still paid by SESB.

“If so, why does SESB need to pay RM18 million per year to TNB Remaco for a routine job?” he asked yesterday.

Wong said there seemed to be no economic or financial justification to grant the contract to TNB Remaco when in the past experienced local contractors were doing it for a cheaper rate.

“Furthermore, the project is an interim solution to increase the generation capacity in the grid until a permanent solution arrives which is the upcoming 300MW LNG power plant in Lahad Datu by 2016.

“Why can’t SESB do the job itself? Why must the project be surrendered to TNB Remaco? What will happen to the outsourcing contract after 2016? Will SESB continue to pay TMB Remaco after 2016?” he asked.

The Sri Tanjung assemblyman said the lopsided contract was another clear sign of the marginalisation of Sabahan rights in the issue as SESB has no power over the power plant or any projects in Sabah.

“TNB decides everything in KL. We demand SESB or TNB Remaco to tell the public how long the outsourcing contract will last. Why should the agreement let TNB Remaco run the standby plant?”

Wong said Pakatan Rakyat alternative budget made it clear that the opposition coalition would take back the management of power supply in Sabah as it is a state asset.

It is estimated that SESB is currently shelling out close to half a million ringgit per day for fuel for the two generator sets which are consuming about 960,000 litres of diesel per day at 48 sen per litre of subsidised diesel.