Sarawak's sole opposition state assemblyperson Chiew Chin Sing has called for the "huge profits" generated by the Sarawak Electricity Supply Corporation (Sesco) to be ploughed back into power generation and distribution of supply to rural areas.

Chiew (DAP-Kidurong) made a last ditch effort to stop the privatisation of the state's power giant when debating the Sarawak Electricity Supply Corporation (Successor Company) Bill 2004 this morning. He was the first to speak on the draft law.

He noted that 60 percent of the electricity supply is currently generated by using gas turbines, a cheaper mode than the use of diesel, coal and hydro-electric power. Sarawak has an installed capacity of 880MW and consumption is about 650MW.

Chiew asked: 'Since power from gas costs so much less (to generate), why are we not reducing the tariff instead of making consumers pay so much, and which has resulted in huge profits being accumulated by Sesco?"

The Bill aimed at paving the way for the dissolution of Sesco, a statutory body set up in 1962 under the Sesco Ordinance, and replacing it with a new company to be incorporated under the Companies Act yet to be named.

The new company will take over the assets (valued at RM4.12 billion as at Dec 31,2002), rights (which include power generation, transmission and distribution) and liabilities (loans) at a date to be determined by the minister in charge.

A public-listed company, Sarawak Enterprise Corporation Bhd (SECB) - currently 52 percent owned by the Sarawak government - will gain full ownership of the new company when the terms and conditions of a memorandum of understanding are implemented. The document was signed last month.

It is not known what the state government's eventual stake will be in SECB but this is expected to be substantial, possibly 70 per cent or more.

Poser for assembly

During the debate, Chiew also said the electricity tariff in Sarawak is the highest in the country.

"I know the rate has not been raised for a long time. Actually, there is no need to raise the tariff for a long time to come. This is simply because there is no competition in power generation in Sarawak. This is a monopoly business."

Chiew said he is aware Sesco had a large geographical area to cover, but pointed out that "the cost of coverage should be paid out of the profits of Sesco and not by imposing a higher tariff on consumers".

Arguing against privatising electricity supply in the state, he said Sesco's enabling legislation could be amended instead to "reflect modern and changing times".

Sesco is empowered (by law) with the approval of the Majlis Mesyuarat Kerajaan Negeri (a state committee) to allot, transfer or dispose of shares, stocks and debentures to any person or company for the purpose of raising capital for specific purposes.

However, Chiew asked: "Can the SECB, a public listed company, own shares directly in Sesco? If not, where does this place the deal in 1996 that allowed the state government to own 52 percent of SECB in exchange for 45 percent in Sesco?

"Has a serious mistake been made which must now be rectified via this bill, so that a successor company is formed and consequently takes over all assets, rights, and liabilities of Sesco?

"Will the minister in charge then direct shares to be issued to individuals or companies who have entered into agreements to acquire part or total ownership of Sesco? I am willing to stand corrected on this."

Bulldozed

Several BN state assemblypersons also took part in the debate. While supporting the controversial bill, they however expressed concerns.

In his winding-up, Deputy Chief Minister and Minister of Finance and Public Utilities Dr George Chan revealed the new utility company will be SECB, which he described as the government's new flagship for the transmission and distribution of electricity in the state.

After the change from Sesco to SECB, he added, the government would ensure that the "people and state enjoy good service from the company with excellent, reliable power supply at affordable prices."

Chiew then stood up to seek points of clarification when Chan was giving his reply but the latter refused to give way.

The DAP assemblyperson said the minister's reply was so general and did not directly answer his queries. Chan said it was too late (to ask questions) and everyone was hungry as it was lunch time.

Chiew said the BN-dominated state assembly "just bulldozed their way through with the Bill".

Last week, DAP member of parliament Chong Chieng Jen said Sesco's assets belong to Sarawak and that "it is not for the government to sell the property of Sarawakians without a referendum or their consensus".

He also said there was no guarantee that, with privatisation, the electricity tariff would not be raised.