Warisan to GRS: RM31b steel project based on assumptions?

Summary

• Warisan assemblyperson Calvin Chong accuses Sabah minister Phoong Jin Zhe and Chief Minister Hajiji Noor of misleading the public over the RM31 billion Esteel Enterprise Sabah Sdn Bhd project.

• He questions why the project was announced before securing the necessary licences for the steel manufacturing plant.

• He criticises the project’s delays and calls for transparency and an apology, claiming it was launched on unverified assumptions and has failed to deliver on promised jobs and timelines.

Warisan assemblyperson Calvin Chong questioned how the project schedule for the RM31 billion Esteel Enterprise Sabah Sdn Bhd steel manufacturing plant was made based on assumptions.

In a statement yesterday, he accused Sabah Industrial Development and Entrepreneurship Minister Phoong Jin Zhe of misleading the public.

“Phoong said the original schedule for the Esteel Enterprise project, with a total investment of RM31 billion, was prepared based on assumptions, and the implementation of this investment project has encountered constraints due to the two-year moratorium imposed by the federal government on the approval of manufacturing licences for steel-related industries.

“The investment project schedule of RM31 billion was prepared based on assumptions? Phoong’s statement is misleading to the people of Sabah, nonsensical, irresponsible, and attempts to fool the Sabah community to cover up the failure of the project.

“Does Phoong understand the meaning and concept of the alleged RM31 billion investment? It represents the largest investment in history, not only for Sabah, but in Malaysia’s history since independence,” Chong said.

Previously, Chong, the Elopura assemblerson, said that the project should already be nearing operational readiness, as the fourth quarter of 2025 is close. He expressed shock that the first phase launch was only held on May 30.

“Does this mean the Gabungan Rakyat Sabah (GRS) state government’s commitment back then - that the first phase would commence in Q4 2023 - was a lie?” Chong had asked.

Phoong, DAP’s assemblyperson for Luyang, later explained that the initial project schedule was based on the assumption that all regulatory approvals would be secured without delay.

He said the project faced constraints, including a two-year federal moratorium on manufacturing licences for the steel industry, adding that Prime Minister Anwar Ibrahim also raised this point during the launch.

“Special approval for the FML (manufacturing licence) was only granted on Jan 24, 2025, which impacted the original project schedule and required subsequent realignment,” said Phoong.

Laughing stock

Chong alleged that the incident “has clearly proven the failure of the GRS government”.

He took Sabah Chief Minister Hajiji Noor to task for announcing the RM31 billion investment project from a private company in November 2022, “based merely on assumptions” and without any guarantee from the investor, or proper due diligence being conducted.

“This failure has become a laughing stock for all Malaysians regarding Hajiji and Phoong, both of whom clearly lack knowledge and are unfit to hold ministerial positions in Sabah.”

Chong questioned why Hajiji went ahead with announcing the project in November 2022, despite being aware that the necessary licence could not be obtained at the time due to the federal government’s moratorium on approving manufacturing licences for steel-related industries.

“It is impossible for an investor to be willing to invest tens of billions to develop a factory without being granted manufacturing licence approval, especially during the licence moratorium implementation at that time.

“This means that since the announcement in November 2022, Hajiji has been deceiving the Sabah community regarding the multi-billion-ringgit investment project mentioned.

“Their announcement that the first phase of the project would begin in the fourth quarter of 2023 and was expected to be completed by the fourth quarter of 2025 was a lie, because Esteel Enterprise was not approved for a manufacturing licence during that period, so how could the project be implemented?” Chong asked.

He also pressed Phoong for details on when the first phase of the project would commence and its expected completion date, given that special approval for the manufacturing licence was only granted to Esteel Enterprise on Jan 24, 2025.

Apologise to the people

“What about the thousands of job opportunities promised to the people of Sabah in November 2022? Hajiji, Phoong, and the GRS government are urged to publicly apologise to all the people of Sabah for their lies, failures, and empty promises.

“I fully support the Esteel Enterprise investment in Sabah if it can be confirmed regarding implementation capability and financial capacity.

“Therefore, all agreements concerning terms and conditions between the government and the investor must be disclosed to the people of Sabah transparently and fairly,” Chong added.

Sabah minister rebuts Elopura rep over steel investment status