Sabah’s RM2.1 billion water question: Savings, settlements, and political fodder 

BY all appearances, it’s an issue about water — but what’s really at stake is political capital.

Sabah Chief Minister Datuk Seri Hajiji Noor hasn’t minced his words. 

Speaking on September 8 last year and recently in Kunak, he laid blame squarely on the Warisan-led administration for what he described as a “costly mistake” — a decision that, according to him, forced the state to fork out RM315 million in compensation to private water contractors.

They involved nine long-term outsource contracts signed in 2009 during the Barisan Nasional era, each lasting 20 years and collectively worth RM3.7 billion. 

These deals handed over the operation and maintenance of 58 water treatment plants and three dams to the private sector.

But that changed in December 2018, when Warisan, freshly installed in government, decided to terminate the contracts. 

Merotai assemblyman Sarifuddin Hatta, who served as Assistant Finance Minister at the time, said the decision was based on internal reviews pointing to inefficiency and lopsided agreements. 

The state, he argued, stood to save RM2.1 billion in long-term costs by cutting off the contracts early.

He also stressed that the decision was made unanimously by the Sabah Cabinet at the time — a Cabinet that included Datuk Seri Christina Liew (PKR) and Datuk Phoong Jin Zhe (Sabah DAP), both of whom now serve under the Gabungan Rakyat Sabah (GRS) administration led by Hajiji.

So why the RM315 million payout?

Because when Warisan fell, the Gabungan Rakyat Sabah (GRS) government chose not to challenge the contractors in court. Instead, they settled — quietly, and with finality.

This was confirmed in a written reply by current Public Works Minister Datuk Shahelmey Yahya, who explained that the money was paid from Jabatan Air Negeri Sabah’s (JANS) own budget allocations. 

Notably, these were funds that had been freed up by ending the very contracts they were used to settle.

So, in the end, was it a cost-saving measure or a costly blunder?

GRS says Warisan made a mess — and they’re left cleaning it up. Warisan says they cleaned up an overpriced system — and GRS paid for it.

It’s not just bureaucratic back-and-forth. In Sabah’s often volatile political scene, the episode is being used as a campaign tool — part of a larger effort to frame Warisan as reckless with public funds.

The messaging is strategic, timed, and sharp. But it may not be watertight.

Sarifuddin’s recent remarks, shared in a public recording, offered a detailed breakdown. He claimed the RM315 million settlement was just a fraction of what would’ve been paid had the contracts continued — which he estimates at RM2.43 billion over the remaining 10–16 years. 

No new contractors were appointed, he added; instead, the state’s own agency, JANS, took full control of the facilities. Since then, the number of plants under JANS has grown to 75 — a sharp increase from 58 in 2018.

The facts, at least on paper, are straightforward. But the politics are not.

Sabah is no stranger to high-stakes narratives. Warisan, which has styled itself as a progressive, multiracial East Malaysian alternative, has long drawn criticism from its opponents — especially on matters of governance.

This latest chapter gives its critics something that appears simple: a big number, a convenient villain, and a cautionary tale.

But like most things in Malaysian politics, it’s messier than that.

Whether RM315 million was a necessary evil or a avoidable payout depends on whom you ask — and whom you trust.

The answers are buried in cabinet minutes, contract clauses, and perhaps the courtrooms that were never entered.

What’s certain is this: voters will remember the number, even if they forget the nuance. - May 22, 2025