Kota Kinabalu: The Federation of Malaysian Manufacturers (FMM) Sabah Branch has expressed concern over the sudden announcement and implementation of a new electricity tariff restructuring, effective Feb 1, 2026, citing the absence of prior consultation with industry stakeholders.
Sabah Chairman Liaw Hen Kong said the announcement, made last Saturday, had drawn a mixed and cautious reaction from the manufacturing sector, particularly due to the lack of engagement by Sabah Electricity Sdn Bhd (Sabah Electricity) before the decision was finalised.
He emphasised that the changes, implemented without consultation, threaten to disrupt supply chains, affect the competitiveness of the manufacturing sector, and increase operational costs, especially for small and medium enterprises (SMEs).
“The impact of the new electricity tariff is significant, with a 15 per cent increase. This will further escalate the cost of doing business in the manufacturing sector, which has already experienced several significant increases over the past few years,” he said.
Liaw noted that while FMM recognises that a base tariff review may be necessary to address the revenue-cost structure gap as Sabah Electricity moves towards becoming a more sustainable energy provider, the manner of implementation remains a major concern.
FMM stressed that industry players must be given sufficient time to understand the new tariff schedule and make necessary adjustments to their operations.
“A dialogue with industry stakeholders should be carried out before implementation. The announcement of any new tariff schedule should be made at least three months in advance to provide adequate time for industry players to prepare,” he said.
Despite its concerns, FMM said it looks forward to improved power supply reliability in Sabah, noting that Sabah Electricity is actively pivoting towards alternative and renewable energy sources.
Liaw added that the move forms part of a broader strategy to transition Sabah towards a cleaner energy mix while improving rural electrification across the state.
Meanwhile, the Sabah Association of Tour and Travel Agents (Satta) urged the State Government to reconsider the electricity tariff increase of about 15 per cent, effective Feb 1, 2026.
Its Chairman, Dato’ Seri Winston Liaw, said the government should adopt measures that allow industry players some breathing space as they continue to recover and sustain their operations. He described the increase as a serious blow to the tourism industry and the SME sector.
Winston said the cost of living has already risen steadily over the past few years, and the latest tariff hike will further burden both businesses and consumers.
“Electricity is one of the major operating costs in the hotel industry. With higher electricity bills, hotels will inevitably be forced to raise room rates. The same impact will be felt by short-term accommodation operators across Sabah,” he said.
He added that restaurants, cafés, and coffee shops are also likely to pass on the higher costs to consumers, as electricity is a key input in daily operations.
“Electricity is fundamental to all businesses, including factories and manufacturing operators. When tariffs rise, costs rise across the board,” he said.
Winston further stressed that the government should be taking steps to reduce the cost of living in Sabah, not increase it.
“For the past few years, businesses have endured frequent electricity disruptions. These outages have caused losses, affected food quality, disrupted business hours, and reduced sales, while overhead costs remain unchanged,” he said.
Without a stable electricity supply, he said, businesses are forced to absorb repeated losses, placing SMEs under severe pressure.
“At a time when many SME operators are struggling just to survive, announcing an electricity tariff hike is like adding salt to an open wound,” he said.
