Monday, November 16, 2009

My Dun Speech for November, 2009 on SALCO


Tuan Speaker,

Since so much has been said about SCORE. I wish to seek some clarification on the SCORE.

I understand that in order to lure investment to Sarawak, the government is offering, through SESCO, very cheap electricity tariffs to these companies.

However, I was told that the system costs of electricity generation and transmission is approximately RM0.20 per unit.

In one of the business news reports, it was reported that Sarawak Aluminium Company Sdn Bhd is negotiating with the Government of Sarawak for the supply of electricity at the rate of RM0.06 – RM0.08 per kWh and that they are looking at the supply of 1,400 Mega Watts. Even at that price of RM0.10 per unit, that will be approximate RM0.10 per unit (kWh) below SESCO's costs of electricity production.

At such rate, we are talking about SESCO selling to SALCO at an approximate loss of RM1 billion a year. Coincidentally, SALCO is a joint venture between Rio Tinto and CMS Berhad. Why are we selling electricity to SALCO so cheaply while other industrialists and businesses pay so dearly for electricity.

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