KOTA KINABALU: The takeover of Sabah Electricity (SE) without substantial capital investment could destabilise the energy sector.
This concern may also affect consumer and investor confidence, says National Consumer Foundation Malaysia Sabah branch chairman David Chan
He said the Sabah Government should only proceed with the takeover if it can meet SE's financial needs and develop long-term sustainability plans.
Chan emphasised that a takeover is not merely a change in management; it requires significant funding and strategic vision to stabilise and improve Sabah's power infrastructure.
He suggested that if the state government cannot invest the needed capital, allowing Tenaga Nasional Berhad (TNB) to continue managing SE might be a better option.
Chan's comments follow concerns from SE's chairman, Datuk Seri Madius Tangau, who warned that the company could face bankruptcy without federal subsidies. SE is currently sustaining a 10% operational loss.
Chan also highlighted SE’s slow progress in adopting renewable energy, which hampers its development. He suggested implementing large-scale solar projects to diversify Sabah's power sources, reduce dependency on costly fuels, and lower tariffs for consumers.
He urged the Sabah government to convene a roundtable discussion with SE, key stakeholders, and relevant authorities to devise a strategy addressing SE's financial challenges, operational issues, and renewable energy integration.
Consumers and investors deserve clarity and confidence in Sabah's energy sector, as reliable power supply and affordable tariffs are crucial for economic growth and the well-being of all Sabahans.
In a recent Dewan Rakyat session on the Supply Bill 2025, Tangau disclosed that SE would face bankruptcy without government subsidies. He referenced a letter from the Energy Commission of Sabah, which stated that while Sabah's electricity subsidy for this year aligns with the 2024 budget, the RM866mil subsidy needed for 2024 is not feasible due to federal fiscal constraints.
During the 2025 Budget presentation, the Federal Government's commitment to the Sabah Electricity 2030 Seven-Year Transformation Plan was notably absent. However, the 2024 Budget reassured the Federal Government's commitment to providing Tariff Subsidy Support for up to six more years.
Tangau explained that this support is crucial since SE's generation cost is 43 cents per unit, whereas the government-approved tariff since 2014 has been just 34 cents per unit. Sabah Electricity incurs a 10-cent loss per unit, covered by the Federal Government, enabling SE to continue its operations.
