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SESB’s journey after almost 20 years
Published on: Saturday, April 08, 2017

By Tracy Patrick
AS night descends on Kota Kinabalu and the sun slowly fades away, bringing with it its life-giving radiance, the landscape of the Nature Resort City quickly transforms itself from a city of green into a city of lights.

Streetlamps keep drivers safe as they speed on the highways and swanky malls blazing all sorts of colourful neon lights pour onto the streets and illuminate the dark sky.

Far away in rural Matunggong, a mother switches on the fluorescent lamps, immediately casting away the darkness from her home while her children bundle up in front of the flickering screen of the television.

And behind all these, is the electricity power that makes it possible and makes the lives of the people more comfortable.

But it is not always this way.

It was not very long ago when the development of the State was severely hampered due to the lack of efficient power supply and the inability of the then Sabah Electricity Board (LLS) to respond to the increasing demands.

In 1996, however, the government mulled the idea of privatising the board with the view of cutting down bureaucracy especially in decision making and to give better efficiency for power supply and generation as the nation hastens towards 2020.

Thanks to this idea, two years later on Sept 1, the Sabah Electricity Sdn Bhd (SESB) was born.

Since then, in less than 20 years, the demand for power supply in the State had increased by 300 per cent from 235 MW to 944 MW last year.

The company had successfully increased its supply capacity from 235 MW then to 1,200 MW, a good 20 per cent margin against the maximum demand, increased its transmission line of 132kV from 478km to 1,640kV and built the longest single 275kV transmission line in the country, a 492km line over the Crocker Range, which connected its West Coast grid to the East Coast grid.

In terms of customer satisfaction, SESB successfully decreased its average interruption experience, measured as System Average Interruption Duration Index (Saidi) from as high as 4,000 minutes per year per customer in 2006, to only 311 minutes last year.

During the same period, the company increased its customer base by 300 per cent to more than 600,000 customers, from a mere 200,000 customers in 1998.

Recently, Daily Express sat down with SESB Managing Director Abdul Razak Sallim to weigh in on SESB’s performance and the gruelling journey the company had gone through over the years.

“I am saddened when I hear people accusing us of ‘tidak pandai kerja’, ‘makan gaji buta’ and many other hurtful comments without realising what we had accomplished in such a short time and with a limited budget and other constraints.

“However, I am not one to complain. I know it is our job and we need to make our customers happy.

We have done much but personally, I think we can do more. I think we can do much better.

In terms of Saidi, we can do a lot better,” he said.

Targeting to reduce the minutes to just between 100 and 120 in the next three years, Razak said in order to achieve this goal, more investment in terms of time, space and money would be needed.

Despite successfully reducing the Saidi enormously by more than 90 per cent in ten years, the self-professed perfectionist admitted that the number is unsatisfactory for a utility company of SESB’s size.

“We should be in between 150 and 180. Even in Australia, the number hovers at around 200 and 250.

But they are big, and we are small. That is not a fair comparison,” he said.

Part of the concern with Saidi, he said, is that despite its role as the sole power supplier in the State, the company only has about 25 per cent power generation share with the majority of the power generation share in the State provided by independent power producers (IPP).

And that share is about to shrink further to only about 20 per cent as more IPPs are set to start operations in the State by 2020.

“When SESB was LLS, we did everything, from power generation, transmission, distribution, sales, collection, disconnection, everything. Ideally, for the survival of the utility company, it should have an appropriate share of power generation capacity.

“Otherwise, we would be at the mercy of whoever has the generation capacity and that is what is happening now,” he said.

In 1998, the share was 60 per cent SESB and 40 per cent IPP. Fast forward 18 years later, now SESB’s capability of independently provide the capacity has shrunk by about 300 per cent.

Technically, said Razak, there is nothing wrong with the arrangement.

However, it had become a challenge for the company in ensuring and controlling a reliable power supply to its customers.

Then again, SESB does not have the licence to build power plant despite having applied for it several times.

That right is given to other private companies although the power of planning for future demands still belongs to SESB and it is SESB’s role to present to the authority the forecast and propose solutions.

Despite this, Sabahans have the impression that SESB provides everything including the power generation and if anything goes wrong, it is SESB’s head they are crying for.

“At one time, recently, there was a gas failure in one of the IPPs which generates 500MW of power.

They managed to rectify it eventually. But the point is, since that plant does not belong to us, we cannot force them to solve the issue as fast as we want them to. It is their asset, they can do what they want,” he said.

For any utility company, power generation is also its main source of revenue because otherwise, then it is just a reseller, buying power from other providers at a cheaper price and selling them for profit.

Right now, that is SESB’s reality and this arrangement seriously dented its capability of developing its infrastructure at a much faster rate.

Razak said they are doing their best with what they have and through prudent spending and careful planning coupled with lots of heartache along the way, the company finally managed to put its finance in the black three years ago.

It was no small feat for a company which consistently found itself in the red and losing as much as RM350 million a year prior to privatisation.

However, Razak was careful to note that the numbers are in the black because the company benefits financially through government’s subsidies, soft loans, grants and the Rural and Regional Development Ministry (KKLW) Rural Electricity Supply projects.

He is adamant, nevertheless, that the company is on the right track mostly because of the strong team he had built as well as the people who work hard to make SESB the company it is today.

As for the future, Razak, who will be retiring by the time SESB celebrates its 20th anniversary next year hoped he had steered the company well on its way not only to becoming the best utility company but also to be a trusted brand.

“I want the people to believe in us. I know there are people who said, if they could, they would choose another utility company. And because they couldn’t, they grudgingly had to stay with us.

“We need to change this perception. We must be trusted because, let’s face it, if our brand is not trusted, eventually, this business will close.

“Our new motto ‘Your Light, Our Pride’ summarises our vision and mission.

When you enjoy electricity at your home, in your workplace, we are proud because we know, we helped make it possible,” he said.

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