SABAH’S first foray into green energy via a geothermal power project in Tawau has ended in failure.

A dispute between two major shareholders of the company awarded the RM419 million contract, Tawau Green Energy Sdn Bhd (TGE), is pushing the country’s first geothermal power project “close to abandonment”, sources told The Malaysian Insight.

“It’s now at a standstill. It could be abandoned if the dispute is not resolved soon,” the source familiar with the project said.

The plant was expected to start operation in June 2018. TGE, after inking a memorandum of understanding (MoU) with the University of Auckland in March 2014 on the development of geothermal energy, had announced that the plant would be operational in 2016.

One of the shareholders involved reportedly was Ramzi Sarofim Kozhya Raad, a Lebanese citizen who is also TGE’s managing director.

DAP Sabah confirmed that TGE’s office in Tawau had closed.

The geothermal power plant, to be built in Apas Kiri around the dead volcano Gunung Maria, was set to generate 30 megawatt (Mw) with the power to be sold to Sabah Electricity Sdn Bhd (SESB) under a 21-year feed-in-tariff (FIT) scheme.

Energy, Green Technology and Water Minister Maximus Ongkili, after a site inspection in August last year, said the geothermal energy technology used was “very green” with extremely low carbon footprint.

TGE’s website stated that the first phase of the project will include drilling exploratory wells to establish the parameters and potential of the geothermal reservoir, constructing a 36Mw (gross) power plant utilising binary technology and constructing a 132 kilovolt (Kv) interconnection to SESB’s state grid.

The project has been dogged by controversy from the start.

In 2014, Serdang MP Dr Ong Kian Ming had questioned why the contract was awarded directly to TGE “which is majority owned by Sabah Umno leaders”.

Ong said a Companies Commission search in 2013 showed Yamani Hafez Musa, the eldest son of Sabah Chief Minister Musa Aman, as the majority 52% shareholder of TGE.

His shares have reportedly since been transferred to another Sabah Umno leader.

DAP’s Sri Tanjong assemblyman Chan Foong Hin said he had since 2013 been asking the state government for answers on the project but met with silence.

In the sitting of the legislature in April last year, Chan asked the state government how Ramzi, whom he said had no experience in power generation, could be appointed as the MD.

Work to drill more exploratory wells also did not take place.

Chan said his initial thoughts were that TGE was facing financial problems.

The DAP lawmaker said since he had been barred from entering the TGE project site in Apas Kiri, he could not confirm rumours swirling around it.

“All I know is that is has been delayed and delayed.

“I don’t think it’s on track.”

Chan said he had also heard TGE is seeking a buyer for the project. – April 20, 2017.