Improve power supply before increasing tariffs

Friday, 6 December 2013

The Sabah government and the federal ministers from the state should have fought for the exemption of electricity tariff increase for Sabah, said STAR Sabah chairman Datuk Dr Jeffrey Kitingan.

He said they should take lessons from the Chief Minister of Sarawak who announced that there will be no increase in power tariff in the state.

Jeffrey was responding to the 16.9% increase in tariffs for Sabah and Labuan compared to 15% hike in the Peninsula commencing next year.

He said the governments and ministers need to understand that as the ruling regime, they are first and foremost, holding trusteeship as well as fiduciary and social responsibilities to the people.

“They cannot put themselves in the shoes of TNB and SESB who are corporate bodies and not government agencies responsible for power generation, maintenance and supply.

“If TNB and SESB cannot operate efficiently, then the government should stop their monopoly and open the electricity sector to other players.

“Let it be known that there are other capable Malaysian companies that are operating power projects in other countries and many are doing well without government subsidies,” said Jeffrey.

He said that the first loss for Sabahans is that there is absolutely no justification for any increase because there was already an increase in 2011 compared to no such increase in tariffs in the Peninsula since 1986 as acknowledged by the minister, Datuk Dr Maximus Ongkili, himself.

“It’s a double increase and a double whammy for Sabahans as increasing costs caused by other factors such as cabotage as well as lower minimum wages compared to the Peninsula are increasing the burden on the people and affecting their daily lives.

“Secondly, the rate of increase of 16.89% compared to 15% in the Peninsula is not only an additional loss but a slap in the face for Sabahans and Sabah leaders. Again, there is absolutely no justification for the higher rate of increase given that there was already an increase in 2011 and contrary to the federal government’s policy for 1-Malaysia.

“The different rates of increase shows that it is 2-Malaysia, one for the Peninsula and the other for Sabah and Sarawak, the so-called equal partners in the Federation of Malaysia,” he said.

Even with the lower rate of increase, Jeffrey said Maximus had announced that the federal government will be spending another RM14 billion for consumers in the Peninsula.

“Why is there no corresponding support for Sabah?” he asked.

Jeffrey said even the people in the federal territory in Labuan are not spared and are burdened with the unfair increase.

“If it is a true federal territory, the rate of increase should be the same as the Peninsula,” he said.

Jeffrey said the Sabah government should ensure that SESB fulfill their obligations to the people in Sabah.

“SESB needs to ensure that there is real improvement and consistency in power supply and operate with efficiency so that there could be a justification for any tariff increase.

“Based on economic theory, if SESB improves its efficiency, it can only mean that the costs of generation of power supply is lowered and this savings will translate into a lower tariff for consumers. There is no basis for any tariff increase without real efforts being put in to provide efficient and consistent power supply,”
he said.

Jeffrey said that part of the decrease in SAIDI (System Average Interruption Duration Index) from 2,867 minutes/customer in 2009 to 557 minutes/customer in 2012 was due to an increase in number of customers. Mathematically, the average SAIDI would also drop even if there is no reduction in the total amount as a higher number of consumers in 2012 compared to 2009 will result in a lower average SAIDI.

The cost of doing business in Sabah is higher than other States in Malaysia

The Sabah Timber Industries Association (STIA) has urged the government to reconsider its decision to increase the electricity tariff rate from January 1, 2014.

STIA secretary general Stephen Chaw said that in June this year, the association issued a statement and sought assistance from the relevant agencies and ministries to resolve the unending power supply problems faced by the timber industry in Sabah, particularly in Sandakan (Seguntor area).

He pointed out the east coast districts of Sabah are facing power disruption almost on a daily basis! The production cost of the wood-based industry in those districts is very high due to the insufficient and inefficient power supply.

“Until today, there is no light at the end of the tunnel and the relevant agencies and government departments have yet to propose an

amicable solution to the problems,” he said in a statement yesterday.

The electricity tariff in Sabah will be increased by five sen/kWh from 29.52sen/kWh to 34.52 sen/kWh.

STIA is disappointed that whilst there is no proposal to resolve the problems, the government has decided to increase the tariff which will

have great impact on the industry in Sabah, particularly during the crucial time of global economic slowdown.

The association opined that at least the basic problems in providing sufficient and constant supply must be addressed before any increase of tariff can be considered or implemented.

“It is a known fact that the cost of doing business in Sabah is higher than other States in Malaysia and yet there is no consideration extended to the industry here when the decision was finalized. The industry in Sabah will never be able to compete nor play on a level field with other states and shall remain to be one of the poorest and least developed states if nothing is done to help the industry,” said Stephen.

STIA is urging relevant agencies and ministries to look at the problems faced by the timber industry players in Sabah and extend the necessary support immediately.

Borneo Post


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