POWER TARIFF HIKE WILL INCREASE BUSINESS COSTS, SAY SABAH MANUFACTURERS

Power tariff hike will increase business costs, say Sabah manufacturers

KOTA KINABALU June 28, 2011: The time is not right for Sabah Electricity Sdn Bhd (SESB) to increase power rates in the state.

Federation of Sabah Manufacturers president Wong Khen Thau said any move to increase electricity tariff would increase the cost of doing business in the state.

He said unlike trading companies that just passed on additional costs to consumers, manufacturers in the state had to remain competitive in local and international markets through lower operating costs.

“We will lose our competitive edge if we cannot keep our costs down,” he said, referring to SESB’s proposal to review the current power charges in Sabah that were last increased 25 years ago.

Wong said any increase in tariff charges should be done later as the current subsidy rationalisation by the Government needed time.

Furthermore, he said SESB services were still below par as the state continued to face power cuts caused by breakdowns.

“A power breakdown causes manufacturers to lose money. They (SESB) are asking to increase the tariff rates but we have not asked for compensation for our losses,” he added.

Wong also noted that in Sabah, industries paid a higher tariff compared to domestic consumers, but in Peninsular Malaysia it was the opposite.

On Sunday, Chief Minister Datuk Musa Aman said the state cabinet would discuss the proposal and study the implications of an increase in electricity tariff.

Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui said it was studying the possibility of increasing power rates because the utility company was losing five sen for every unit of electricity sold to consumers.