Sarawak opposition politician Dominique Ng has called for a public referendum or a royal commission of inquiry into the privatisation of the state-owned power utility company, Sarawak Electricity Supply Corporation (Sesco).

Ng told malaysiakini today that, if this is not done, a signature drive would be launched "to express public concern" over the state government's move to place "assets of strategic and security importance" in the hands of a private entity - the public-listed Sarawak Enterprise Corporation Bhd (SECB).

Ng, a Parti Keadilan Raykat (PKR) member and social activist, attempted to take his case to the 62 state assemblypersons at the start of the legislative assembly sitting in Kuching yesterday.

He managed to distribute copies of his open letter opposing the proposed takeover of Sesco which was constituted in 1962 under the Sarawak Electricity Supply Corporation Ordinance with rights to generate, transmit and distribute power.

The open letter called on the assemblypersons to reject a bill that would spell the end of Sesco, urging them to "save Sesco and save our Sarawak heritage".

On Monday, the state government will table the Sarawak Electricity Supply Corporation (Successor Company) Bill to dissolve the corporation and provide for the transfer of "the property, rights and liabilities" to a successor company, believed to be SECB.

(A Memorandum of Understanding was signed in May to hand over full ownership of Sesco to SECB on an "appropriate date", according to Deputy Chief Minister Dr George Chan.)

There is little doubt that the BN-controlled state assembly will pass the Bill, although several members are expected to raise their concerns over the social, economic and political consequences and implications of the move for the people of Sarawak.

'Cash cow'

Both Keadilan and Sarawak DAP have voiced their opposition to the privatisation move.

In a statement, Ng described the move as a "legalised daylight robbery of one of the largest cash cows still available in Sarawak".

"In a worst case scenario, the successor company can practically squander all the assets and revenues of Sesco and laugh all the way to the bank and maybe come back for more by holding to ransom the entire population of Sarawak in their need for electricity supply," he said.

The Sarawak government through the State Financial Secretary Inc holds a 52 percent stake in SECB which in turns currently owns 45 percent of Sesco, the assets of which were worth RM4.12 billion as at Dec 31 last year.

According to the SECB 2003 annual report, Malaysians own 89.76 percent of its equity, Singapore 0.44 percent and foreigners 9.8 percent.

The shareholders included nominee companies (21.33 percent), government and government-related agencies (61.26 percent), foreigners (9.8 percent), and bumiputra, Chinese and other individuals.

The single biggest individual shareholder is TK Lim (9.8 percent), who was involved in putting the deal together in 1996 when the state government took a controlling interest in SECB (formerly known as Dunlop Estates Bhd) in exchange for 45 percent of Sesco.

Sesco 'profitable'

Ng argued against privatisation, claiming it would not benefit the people and instead would likely burden consumers when a private entity takes over power generation, transmission and distribution.

He said he failed to understand the logic of the move, especially when Sesco has been well managed and has been turning in profits year after year.

Its annual reports for 2001 and 2002 showed profit after tax of RM102 million and RM114 respectively.

The SECB 2003 annual report put profit contribution from Sesco as RM104 million before tax, up from the previous year's profit before tax of RM36.7 million, he added.

Ng said it therefore appeared that "virtually every cent of the profit for SECB comes from Sesco".

He also pointed out that according to the annual reports for 2001 and 2002, cash and cash equivalents held by Sesco amounted to RM490 million and RM397.5 million respectively.

(Cash and cash equivalents refer to cash reserves which can be used for various purposes, including investments and expansion of services.)

SECB has almost an all-Sarawakian board of directors. The chairman is Taha Ariffin, a former senior state civil servant turned corporate leader, the chief executive officer is a former state financial secretary Wan Ali Yubi; and the executive director is Chew Kong Seng.

SECB, which has a substantial stake in state-owned wafer foundry in Kuching 1st Silicon, last year made what has been described as accumulative provision, according to its 2003 annual report, for "accumulative value of investment in 1st Silicon of RM131.9 million".

According to a recent Far Eastern Economic Review report, 1st Silicon - one of two state-owned medium-size wafer plants in Malaysia - had incurred losses totaling more than RM1.7 billion over three successive years from 2001.

The provision of RM131.9m diminution value on investment is an unsecured irredeemable convertible loan stock.

Once the bill is passed at the current sitting of the state assembly, the minister-in-charge will then determine the date it will take effect, and from thenceforth Sesco will no longer come under the scrutiny of the state assembly.