Did you engage any consultant to perform a cost-benefit analysis or due diligence assessment?
This is the question PKR is asking the Sarawak government after its move to acquire the entire equity interests of Sarawak Hidro Sdn Bhd (SHSB), the owner and operator of the Bakun Hydroelectric Plant, from the federal government.
Sarawak PKR vice-chairman See Chee How said it was usual and standard practice that an audit be conducted before any major investment.
In a statement today, he cited the company’s non-current liabilities of RM5.25 billion and current liabilities of RM907 million at the end of 2015.
“In the long run, will this turn into a huge financial burden for the state and all Sarawakians?
“For the long term, we have to take into consideration the financial commitments in servicing the loans and the income we can generate from all the electricity generation facilities we have in the state.”
Sarawak Chief Minister Abang Johari Openg had earlier today announced that the state’s electricity utility firm, Sarawak Energy Bhd, would acquire the equity from the finance ministry and the Federal Lands Commissioner.
He said with the deal, the ownership and operation of Malaysia’s largest hydropower electric plant would be fully returned to Sarawak.
See, who is Batu Lintang assemblyman, said it was not true the acquisition from the federal authorities was being made at a huge concession.
“With the agreement to purchase the equity interest of the company at RM2.3 billion and bearing the liabilities of more than RM6 billion, we are now acquiring the hydroelectric power dam at more than RM8 billion.”
He said the Sarawak government had made an attempt before to acquire the Bakun plant for RM7.3 billion in 2011.
Although it did not materialise, the state entered into a 30-year power purchase agreement beginning June 1, 2011 to buy electricity from SHSB at 6.25 sen per kilowatt hour, he added.
“Undoubtedly, Sarawak Hidro is making a profit but (this is) due to the power purchase agreement it has with Sarawak,” he said, noting that the estimated worth of SHSB’s electricity generation facilities is RM7.29 billion.
“The entire revenue of Sarawak Hidro is from the sale of electricity to Sarawak.
“We are now to sell the power to ourselves and at the moment, both Bakun and Murum HEP dams are operating at less than half of their capacities.”
See said it was not wrong for Sarawak to “bail out the cash-strapped federal government”, but the state must ensure the money will go towards benefiting Sarawak in matters like financing the Pan-Borneo Highway, and rural development and transformation projects.
He urged Abang Johari to reveal the acquisition’s full financial details, the state’s short-term and long-term plans to meet added financial commitments, and how the move would serve the best interests of Sarawak.
Source : @ FMT Online