Govt in bid to recover RM3.5 billion for Sabah’s incomplete pipeline project
The 662km gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau costs a total of RM4.06 billion.
KOTA KINABALU: Putrajaya is currently trying to recover the money it has already paid to the company contracted to build the Trans-Sabah Gas Pipeline (TSGP) project.
Minister of Energy, Science, Technology, Environment and Climate Change Yeo Bee Yin said the company was paid 84% of the total cost of the project worth RM4 billion, but the project progress was only recorded at 14%.
“We have two options at the moment. Either to recover the fund which was paid prematurely or to carry on with the project,” she told reporters today after attending a briefing by indigenous empowerment group Pacos today.
The TSGP project involved building a 662km gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau, costing about RM4.06 billion in total.
According to Yeo, about RM3.5 billion was already paid but the actual work had not been completed.
“The purpose of the project was to have a gas power plant in the east coast of Sabah. But the question now is, do we need a gas power plant? Is there a better option out there, like biomass, for example?” she asked.
“If we could recover the money, we can explore other options. Otherwise, the money will become sunk cost that we need to consider before weighing in our options to address power woes in Sabah’s east coast,” she said.
Yeo said she cannot give a fixed timeline for the decision because it all depends on negotiations.
The government, she said, is hoping the money is recovered or it will have to decide its next course of action based on the least amount of money involved.
On the high rate of power interruptions in Sabah, Yeo said while Sabah has a 32% reserve margin, the west coast has the bulk of the reserve and the east coast has negative reserve margin on peak hours.
She said there is a pressing need for the transfer of power to the east coast by upgrading the transmission line from 180MW to 400MW.
“Once the transmission line is completed, the east coast will need a new power plant by 2026. So, by 2022, we have to find the best option and tender it out because it would need four years to build a power plant.
“We still have time. There is no need to rush into it now,” she said.
Her ministry is targeting to reduce the average outage interruption in Sabah from 118 minutes currently to 100 minutes by 2021.
“The rate is still two times higher than in the peninsula, but we consider it as a highly ambitious target because the problem in Sabah’s east coast is the lack of power, while in the west, it is the ageing distribution lines and power theft,” she said.
Meanwhile, Yeo said she was aware of the proposed Papar Dam by the Sabah government, adding she felt it was premature for her to comment about the project at the moment.
“I need more information about it as I only got to know about it a couple of days ago. I think the project involves only the state at the moment. If the jurisdiction falls under my ministry, then I will be more comfortable to talk about it,” she said.
The proposed Papar Dam will cover 5.22 sq km, an area just 0.08 sq km smaller than the area that the Kaiduan Dam would cover.
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The cost of the Papar Dam is estimated to be RM2 billion. The project has been criticised as its location could displace some 2,000 people.