KOTA KINABALU – A RM2.3 billion small hydroelectric dam in Sabah that was scheduled to be completed last year has yet to be built as the appointed contractor tasked to undertake preliminary work lacked funds, people familiar with the matter tell The Vibes.
The Upper Padas hydroelectric project was mooted in 2013 under then energy, green technology and water minister Datuk Seri Maximus Ongkili and was scheduled for completion by 2019. Then Sabah chief minister was Tan Sri Musa Aman.
Putrajaya also approved a RM569 million soft loan for state utility company Sabah Electricity Sdn Bhd (SESB) for an equity injection into a special purpose vehicle or consortium tasked to undertake the project.
But initial work has yet to kick off, sources say.
“No physical work has been done because the contractor does not have enough money to start the project.”
The source declined to name the said contractor. It is also not known whether this contract was awarded directly or through open tender.
Sources said many parties had been lobbying for shares if a consortium was set up and that SESB’s role was only for preliminary work. The utility company would then sell the concession to a third party, but “the project has stalled for some time”, an insider said.
The project is supposed to be at the Padas basin around Kuala Tomani in Tenom. The plant would have a capacity of 180MW and involve a water catchment area of only 590ha or 2.3ha per megawatt.
For comparison, in Sarawak, the Bakun hydroelectric project requires up to 29ha per megawatt of power generated and the Murum dam needs 26ha per megawatt.
Power generation in Malaysia’s easternmost state has been challenging on all fronts. Aside from topography, which naturally impedes the construction of large-scale hydroelectric dams, insiders said other problems such as corruption, theft and politics have scuttled any meaningful discussions for reforms.
Sabah has the highest power disruption in the country with a system average interruption disruption index (Saidi) of 267 minutes/year/customer compared to 50 m/y/c and 112 m/y/c in Peninsular Malaysia and Sarawak respectively, according to Energy Commission data.
Interruptions are its worst in the remote corners of Sabah, such as Pitas and Tambunan, which happen to be among the poorest areas, with a Saidi of 302.63 m/y/c.
SESB is also financially distressed. The utility company’s current liabilities (RM2.11 billion) have exceeded its current assets (RM1.91 billion) for FY19, a red flag for a business to continue as a going concern.
Further, SESB defaulted on an RM304.9 million loan with Putrajaya as at December 31, therefore accruing a RM13.1 million penalty. SESB is currently negotiating with the federal government on the delay and penalty.
It also lacks sufficient cash or assets to fund its short-term debt. SESB held RM285.99 million of dry powder at the end of December last year, which is insufficient to even cover operating expenses at RM1.79 billion. – The Vibes, October 1, 2020
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