15 years long Power Exchange Agreement (PEA) cost RM 1.1 billion for Sabah

24 Sept 2021

KOTA KINABALU: Democratic Action Party Luyang State Assemblyman questioned Deputy Chief Minister cum Sabah Works Minister, Datuk Seri Bung Moktar regarding the Power Exchange Agreement (PEA) between Sabah and Sarawak.

“I believe that this should be brought up in the State Assembly as we might be purchasing electricity at a higher price than average from Sarawak,” Phoong questioned in the state assembly during Works Ministry winding up session.

“From the written answer replied by the minister, Sabah is expected to purchase electricity at the price of 28.5sen/kWh, and we will have to bear an annual escalation rate of 1.5 per cent.

“On the 15th year, 2038, we will have to purchase at the tariff of 35.6sen/kWh, it is important to look into this and consider whether is it worth the deal.

“If we were to purchase power at such a high tariff, how much would the state charge the public? Will Sabahans have to bear a higher electricity tariff?” Phoong queried.

Bung however did not reply to the question with details.

“As I mentioned earlier, I do not have the details of the agreement and it would be inappropriate if I mislead the Dewan.

“I will ask the Chairman of SESB to explain clearly regarding the deal and I would also disagree if we could purchase at a lower price but we compromise for this deal,” Bung replied.

Former Chief Minister cum Senallang rep, Datuk Seri Shafie Apdal also raised concerns regarding the matter during the concluding session by the Ministry of Works.

“This is a written reply from the Ministry of Works, it is unacceptable if the Minister was not informed by SESB as this is a formal written document,”

“This is a matter that affects every single one of us and we must rectify this if SESB did not inform the minister or the state government as a whole,” said Shafie

Bung stated that he took note and will reply in the next upcoming assembly sitting.

According to the written reply by the Ministry of Works to Luyang State Assemblyman, the details of the agreement are as following:

Capacity import starting from 30MW (min off-take 50%)

Tariff starting at 28.5sen/kWh (1.5% annual escalation rate)

Effective starting from 2023

Term of agreement - 15 years

Both parties have to build a transmission connection to each’s borders

Phoong further commented that Sarawak for not equally treating Sabah in comparison to foreign investors.

“Sarawak state government can offer 5 to 20sen per kWh to investors but Sabah has to seal the deal at 28.5sen per kWh? This is mistreating Sabahans.

“The initial idea (purchase power from Sarawak) was proposed during Pakatan Harapan’s governance but Sarawak’s offer was too heavy and therefore, no agreement was reached.

“However, the deal has been signed by the GRS government swiftly, the Chief Minister, Datuk Seri Hajiji, Dato Bung Moktar and other ministers must clarify how does the deal benefit fellow Sabahans,” questioned the Pakatan Harapan Sabah Youth Chief.

He urged the State Government to look into the matter and plan further ahead.

“To resolve the insufficient power supply in Sabah, we must be prepared to build power stations and the government must address the issue with proper plannings.

“It is unnecessary to purchase 30MW electricity at such a high price from Sarawak as we would not be able to gain after including all costs despite the minister stating that our tariff is at RM 0.41,” said Phoong.