Warisan rep files police report over delayed RM31b oil and gas project

Summary

• Warisan’s Calvin Chong files a police report over the lack of progress for an RM31 billion project by Esteel Enterprise Sabah Sdn Bhd at the Sipitang Oil and Gas Industrial Park.

• The Elopura assemblyperson says a visit to the site shows that it remains undeveloped, putting the 2026-2027 operational timeline in doubt.

• The state government previously cited regulatory delays, but Chong calls this an excuse to cover up the project’s failure.

Warisan assemblyperson Calvin Chong has lodged a police report over an alleged failure to implement an RM31 billion steel manufacturing and processing project by Esteel Enterprise Sabah Sdn Bhd in the Sipitang Oil and Gas Industrial Park (Sogip).

In his report filed at the Sandakan police station, Chong claimed that his inspection of the site alongside Sri Tanjong assemblyperson Justin Wong on June 10 showed no visible construction activity.

Chong highlighted that previous media reports from Nov 30, 2022, indicated that the first phase of the project was supposed to begin in Q4 2023 and be completed by Q4 2025.

“Only a few months remain until Q4 2025, when the first phase should be ready for production.

“However, it is clear that the Gabungan Rakyat Sabah (GRS) government’s announcement on the first phase was a lie to the people of Sabah, as no development has taken place on the site,” Chong said in the report sighted by Malaysiakini. 

He also pointed out that while the investment value by Esteel Enterprise was earlier said to be “nearly RM20 billion”, the figure has now “suddenly” risen to RM31 billion, despite a supposed lack of progress from the company since 2022.

“This is highly suspicious. How did (Sabah Chief Minister) Hajiji Noor and (Sabah Industrial Development and Entrepreneurship Minister) Phoong Jin Zhe evaluate and verify the investment sum of RM31 billion?

“On what basis did the GRS government trust Esteel Enterprise’s capabilities without any development or track record on site since the project announcement in 2022?” questioned Chong, who is Elopura assemblyperson.

No indications of construction

Also taking to Facebook to share a clip of his visit to the project site, Chong shared his dismay over how the site remains undeveloped, claiming that there are no indications whatsoever of any construction efforts.

As such, Chong said that with just over a year remaining until the project’s promised completion date, the target is now in doubt as construction has yet to begin.

“The Sabah government has made several announcements and promises regarding the Sogip development, but to date, no physical progress can be confirmed at the project site,” he said in the caption for the post uploaded yesterday evening.

“It was announced that the Sogip project is expected to be operational by 2026-2027, (but) the reality on the ground is that there are no official reports or visual evidence of groundbreaking activities, basic infrastructure installation, or contractor presence,” he added.

In December last year, Hajiji reportedly confirmed that Sogip is expected to begin operations in 2026 and 2027. 

Last month, Hajiji said the three-phase project represents a significant milestone for the state, assuring that it will create jobs and improve the livelihoods of people in Sipitang and the entire state.

Hajiji reportedly made the remark during the launch of Esteel’s RM6.4 billion Phase 1 project at the Sabah International Convention Centre on May 30.

‘Delay was not anticipated’

Previously commenting on the launch, Chong had expressed shock at the supposed lateness of the event, saying: “Does this mean the GRS state government’s commitment back then - that the first phase would commence in Q4 2023 - was a lie?”

In response, Phoong, who is also the Sabah DAP chief, said 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.

However, Chong had questioned how the project schedule could be made based on assumptions, accusing Phoong, who is also the Luyang assemblyperson, of misleading the public.

Chong said then that Phoong’s statement is “nonsensical, irresponsible, and attempts to fool the Sabah community to cover up the failure of the project”.

Chong’s remarks, however, drew the ire of Phoong’s aide, Chan Loong Wei, who condemned the Elopura representative for “repeatedly launching irresponsible attacks” over the Esteel Enterprise project.

Accusing Chong of politicising the matter and distorting facts, Chan asserted that if the assemblyperson is genuinely curious or wishes to seek accountability, the matter could be raised in the upcoming state assembly sitting.

Chan also questioned whether Chong and Warisan are against industrialisation and economic growth, insisting that “every time” the government works hard to bring in credible investors, irresponsible sentiments are dredged up.

He also defended Esteel Enterprise as a company owned by a credible Chinese businessperson who also founded a “Top 100 Private Company” in China in 2023.

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