Spotlight on Sarawak electricity

Spotlight on Sarawak electricity

The federal government reimburses the Sarawak power supply corporation about RM1.4 million a month so that about 70,000 households in Sarawak can enjoy free power supply, reports the Borneo Post.

Sounds good?

Let’s take a closer look at Sarawak Energy Bhd, which is 65 per cent owned by the State Financial Secretary Sarawak (which falls under the finance minister, who is Chief Minister Taib Mahmud) and 4 per cent by EPF:

Financial year ended 31 Dec 2008
Turnover RM1.3 billion
Profit before tax RM293m (RM401m in 2007)
Directors’ fees, etc RM3.8m (RM2.3m in 2007)
Now, let’s compare that with Tenaga Nasional Bhd, which was 38 per cent owned by Khazanah and 14 per cent by the EPF:

Financial year ended 31 Aug 2008
Turnover RM25.8 billion
Profit before tax/zakat RM3.0 billion (RM4.8b in 2007)
Directors’ fees, etc RM2.3m (RM1.8m in 2007)

Notice anything?

Planning and Resource Management Second Minister Awang Tengah claims that Sarawak enjoys lower electricity tariffs compared to other states and neighbouring countries.

In a study by Tenaga National Bhd (TNB) on 10 utilities companies, the average tariff for the peninsula was 32 sen per kilowatt-hour (kwh), while in Sarawak it was 29 sen per kwh.

“I’m talking about average, so overall, we’re still lower than the peninsula,” he stressed.

Yes, of course, he is talking about the “average” tariff for various categories of consumers: domestic, commercial, industrial, public and street lighting.

But what about domestic users alone? For your homework today(!), calculate a domestic user’s bill if she consumes:

– 500 units of electricity in Sarawak (look up SEB tariffs here.)

– 500 units of electricity in the peninsula (look up TNB tariffs here.)

Go on, work it out.


If domestic tariffs in Sarawak are higher than the peninsula’s and if Sarawak’s average tariff is still lower than the peninsula’s as Awang Tengah claims, logically it follows that the average tariff for commercial/industrial/other use is lower in Sarawak. A cursory comparison of the industrial tariffs imposed by SEB and TNB suggests that this could be the case.

If this is true, does it mean that domestic users in Sarawak are partially subsidising other users (industrial, commercial, etc)?


  1. Tariff hike on the pipe line? TNB is a hopeless GLC. Running subsidiaries at a lost. Paying fat salaries, gratuities and bonuses to employees when the company is not performing. TNB needs real corporate men to run it and its subsidiaries. If I’m not mistaken TNB is also running a university that runs a deficit of more than 45 million a year. Still TNB allows it to happen. When others are making profit, in TNB they are loosing money. And now the talk is tariff increase. Another burden on the rakyat.

    • It’s not just the university, Karma, the IPPs are also a heavy burden on TNB.

      Actually, I do believe that properly selected and qualified civil servants could run TNB without any political interference and after sorting out the lop-sided power purchase agreements. There is no need to privatise further.

  2. It’s hard to make a judgement on whether domestic energy customers are subsidising commercial / industrial. Easier if they’re getting different rates for the same consumption, but harder if you’re taking economy of scale or how well matched the industry is to the supply. I imagine a smelting plant would be a better load for a power station that cannot quickly respond to changes in demand than tens of thousands of Malaysians flicking the TV, air-con and kettle on as they leap into a hot shower after work. The cost of infrastructure to deliver energy to large consumers may also be substantially cheaper RM/Joule.

    The directors’ emoluments, on the other hand, don’t seem to be such a complicated controversy!

  3. Of course it’s a rip-off. Look at the names of the directors and top management and they (are) linked to (someone’s) family and their close associates. And if you have inside information, you will also know that most of the major suppliers to SEB are (allegedly) cronies and BN politicians. So what’s new?

  4. Using mean as a measure of average is often a misleading mathematical quantity. Politicians like it a lot because it could cover a multitude of “sins” and misallocations. We should also look at median to see how the numbers are distributed. Often median would give a very different picture. In this regard I think, anil, hat hit the nail on the head – the householders are subscribing the industries and business concerns.

  5. 3.8 Million was paid to the directors of SEB compared to 2.3million paid to directors of TNB? That is 1.5million more for a co. with a turnover of 5% the size of TNB. Hello, can SEB explain this?


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