SABAH power supply provider Sabah Electricity Sdn Bhd is on the verge of bankruptcy.

Its fate now hangs on the decision of the Energy, Green Technology and Water Ministry (KeTTHA), the Finance Ministry and Tenaga Nasional Bhd (TNB).  

“The discussion is crucial, especially since SESB continues to make losses and is on the verge of insolvency,” KeTTHA Minister Dr Maximus Ongkili said in a statement today.

TNB owns 82.75% of SESB, while the rest of the stake is held by the Sabah government.

“SESB’s current average tariff is 34.52 sen/kwh while the cost of energy generation is 56.50sen/kwh,” Maximus said.

“Hence, the federal government has been subsidising SESB’s fuel costs, primarily diesel, medium fuel oil and gas,” he said.

The federal government has also provided the bulk of SESB’s capital expenditure.

A total of RM4.2 billion was spent by the federal government to boost SESB’s operation, and both TNB and SESB spent their portion on capex expenditure since 2012.

Ongkili said through these efforts, the System Average Interruption Duration Index was reduced from 777 minutes/customer/year in 2014 to 311 last year, and is expected to go down further to 280 by year end.

SESB has called for a tariff revision since its last review in 2014. However, the federal government has a duty to ensure the tariff is fair and affordable to consumers.

“We also want to ensure that the tariff revision is reflective of the quality of power delivered,” Maximus said in response to comments by TNB chief executive officer Azman Mohd, who had said that discussions on the future of SESB was imminent and that an agreement was expected by the new year to determine the best way forwards. – December 22, 2017.