TUARAN MP Datuk Seri Wilfred Madius Tangau has expressed concern over the alleged omission of a crucial RM866 million in power subsidies for Sabah in this year’s national budget.
He warned that without it, Sabah Electricity could soon face financial collapse.
The Upko leader had cautioned that the state utility firm formerly known as Sabah Electricity Sdn Bhd (SESB), could encounter severe operational issues, potentially leading to a statewide blackout as early as January next year.
Tangau explained that the federal electricity subsidy is vital to keeping power affordable for Sabah’s consumers, and its absence would not only drive SESB toward bankruptcy but also hamper its ability to sustain operations.
“The utility is technically bankrupt,” said Tangau, adding that the subsidy was essential to cover a 10-sen loss per unit sold to consumers in Sabah.
“To cover this loss, the federal government provided around RM800 million in subsidies to SESB last year alone,” he said during a debate on the 2025 Supply Bill in parliament, today.
Tangau is also the Sabah Electricity Chairman.
Tangau said he learned of the subsidy omission from a letter sent by the Energy Commission of Sabah that cited the Federal Government’s fiscal constraints as the reason for withholding the RM866 million allocation.
The electricity tariff in Sabah has remained at a subsidised rate of 34.52 sen per kWh since 2014, despite actual generation costs reaching approximately 43 sen per kWh.
Tangau warned that without the subsidy, Sabah Electricity “will soon be unable to pay Independent Power Producers and fuel suppliers,” potentially blocking fuel supplies to power plants and leading to “a complete collapse of the entire system.”
Sabah Electricity currently relies heavily on the IPPs. It only generates approximately 20% of power to the state, while the rest are IPPs.
Tangau stressed that electricity is a matter of national security, warning that without a stable power supply, critical sectors like hospitals, airports, water supply, communications, and essential services would face significant disruptions.
Both Sabah Electricity and the Sabah state government have submitted appeals for urgent funding, but Tangau noted that the federal government has indicated it currently lacks funds for this.
Tenaga Nasional held over 80% stake in Sabah Electricity, while the rest was owned by the Sabah Government. – November 4, 2024
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