Sarawak DAP has called on the state government to re-consider its decision to privatize the supply of electricity, urging it not to proceed with plans to dissolve the state-owned Sarawak Electricity Supply Corporation (Sesco) and replace it with a new company.

Opposition Bandar Kuching MP Chong Chieng Jen (photo right), in a five-page letter of protest handed to Deputy Chief Minister and Minister of Finance and Public Utilities Dr George Chan, asked the government not to go ahead with tabling the Sesco (Successor Company) Bill due for tabling and debate on Monday in the current sitting of the state assembly.

Among its objects, the Bill is to pave the way for the dissolution of Sesco, set up in 1962 as a statutory body under the Sesco Ordinance, and for the transfer of its assets, rights and liabilities to a new company, details of which are yet to be disclosed.

Malaysiakini

understands that the new company to be incorporated under the Companies Act will hold the assets, rights and liabilities once Sesco is dissolved and becomes a wholly-owned subsidiary of Sarawak Enterprise Corporation Bhd (SECB), in which the state government has a controlling stake.

Only the state government has the right to determine power tariffs which the new company and any other independent power stations are legally bound to follow.

Presently, Sesco has rights over power generation, transmission and distribution. It has an installed capacity of about 880MW coming from gas, hydro, diesel and coal fired stations. Sesco has about 200MW excess capacity.

RM4.12 billion assets

In 1996, the state government took a 52.12 percent stake in SECB (formerly known as Dunlop Estates Bhd), in exchange for 45 percent of Sesco.

In May this year, the State Financial Secretary signed a Memorandum of Understanding (MoU) with SECB which is understood to make the latter 100 percent owner of Sesco.

The state-owned corporation has assets valued at RM4.12 billion, with what is equivalent to cash reserves of about RM400 million as at December 31, 2002.

The state-owned corporation has been turning in good profits, with figures for 2001 and 2002 showing profits in excess of RM100 million each year. Figures from 2003 are not available, but those who have excess to the profits and loss accounts say "the profits are better than previous years."

In his letter, Chomg said in 2003, SECB group made a profit before taxation of RM102 million, of which Sesco contributed RM104.3 million. "In other words, if not for Sesco, SECB would have made a RM2.3 million loss in 2003."

According to observers, the state government is unlikely to withdraw the bill and will go ahead with the new company to replace Sesco. It is also expected to go ahead with the MoU to finalise the deal with SECB.

Sole opposition state assemblyperson Chiew Chin Sing (DAP-Kidurong) and several BN state assemblypersons are expected to speak on the matter.

Chong, who is also state DAP secretary, led a 10-member party delegation to attempt to personally hand the letter of protest to Dr Chan yesterday.

Dr Chan did not get up from his seat inside the state assembly chamber, although the delegation waited for him at the lobby foyer after sending him a message.

Belong to Sarawakians

Later, the DAP delegation requested help from a state assembly messenger to pass the letter to him. They also put up banners to show their objection to the privatization move.

Chiew later told malaysiakini that he noted "people around such as assembly staff, government drivers and even some assemblypersons did not seem to be unhappy when we displayed the banners." The event received little publicity in the local media, however.

In his points of objection to the privatization move, Sarawak's sole opposition MP said Sesco's assets belong to Sarawakians.

"It is not for the government to sell the property of Sarawakians without a referendum and the consensus of the people of Sarawak," he stressed.

He said the whole privatization exercise lacked transparency, saying the government should not rush into it without public consultation.

The contents of the SFS-SECB MoU signed in May were not made public. Not even state assemblypersons were informed about the details, he added.

Chong said the state assembly would lose its supervisory role over the business activities of the monopoly electricity provider.

"The role of the state assembly as a guardian of the property of Sarawakians is thus being undermined through this privatization exercise," he asserted.

No public participation

The MP also said that the choice of the company which will run the privatized business leaves much to be desired.

"A simple glance over the performance of SECB will justify the worry of many Sarawakians over the ability of the company and cast doubt on the choice made by the government."

Chong also questioned why there was no public participation in the successor company.

"In 1993, when Singtel, a Singapore government-controlled monopoly telecommunication provider went public, all Singapore citizens were entitled to subscribe to the shares at a discounted price. This was a move by the Singapore government to share its wealth with the people of Singapore."

Sarawakians had for the past years paid the most expensive tariffs in the country and contributed to wealth accumulation of Sesco.

It was therefore unthinkable, he said, that when "Sesco goes public, Sarawakians are not given discount on IPOs and instead foreign nominees are given interest in the successor company."