Wednesday, January 28, 2015

Sarawak is lucky to have a leader like Tun Abdul Taib

Undeniably, the State has been very successful in terms of progress and development during the last 51 years of Independence within Malaysia, more so during the last 33 years under the leadership of Pehin Sri Abdul, who is acclaimed of being bold and visionary in his tireless efforts to transform Sarawak from one of the least developed to become one of fastest developing states in the country. 

This is the new reality of the successful efforts in development with the philosophy of the politics of development during the last 33 years. For example, the state can boast the overall progress and prosperity six times better than those being achieved by the previous governments, mainly the Brookes and colonial administration put together during the last 200 years. 

Kuching Waterfront (1960s)
Kuching Waterfront

Looking ahead, Sarawak is poised to achieve greater height of success in terms of development and progress; it should be able to join other states to become a developed state by the year 2020. 

Sarawak with the per capita income of about RM42,000, should be  able to attain the status of a developed economy by the year 2017 or earlier than the year 2020.  It is anticipated that the future development, with a very encouraging response from foreign investors towards the industrial development, will be massive. 

The gross domestic product in 1963 was RM505 million and now after 50 years of Independence, it is RM108 billion. The per capita in 1963 was RM688 and now it is RM42,000.

Undoubtedly, the people, since Independence in 1963 have been enjoying the benefits of development.  For example, there were more people under employment than employment in 1963. Generally, the people had to live from hand to mouth. They had to work first before they could have their meals. By the 70s, there were only 300,000 job opportunities. Now there are 1.1 million job opportunities in the State. 

The rate of unemployment in 1990 was 9.9%. It has dropped to around 4% now. As a consequence, the rate of poverty has been reduced from more than 60% in 1963 to 2.4% now. The household income in 1963 was only RM410 and now it is RM4,200 an increase of more than 10 times. 

With the current pace of development to be accelerated with the development of SCORE, the development of Samalaju Industrial estate and Tanjung Manis Halal hub in particular, Sarawak will become a developed State by the year 2017 or 2018 well before the year 2020.  That is the overall economy that the people will be living in towards the year 2020 and beyond. 

Arguably, Sarawak has been able to succeed fast with most of the income coming from outside. The State, with a population of only 2.5 million, cannot depend on its own wealth and resources.  Fortunately, Sarawak has become part of the world trading partner and has been able to play a global game to build its revenue and wealth. 

The Chief Minister, Datuk Patinggi Tan Sri Adenan Haji Satem in his speech during the Malam Menjunjung Kasih (People’s Appreciation dinner for His Excellency for his 33 years of dedicated service to the people, State and country as the Chief MInister) said it would take him until the following morning to list out things that His Excellency has done for Sarawak.

Datuk Patinggi Adenan used to say if the history of Sarawak is written in future, the chapter on Tun Abdul Taib be the most significant chapter in the history of Sarawak.  He has succeeded in transforming the state from the most backward state; the back water to what it is today, one of the most progressive states in the country.

His Excellency, as the Chief Minister, transformed Sarawak from the back water for so many years to what it is today, prosperous, confident, developed, maybe not enough development but he has shown us the direction.  That was his contribution.

Simpang Tiga Interchange

Datuk Patinggi Adenan, in paying a glowing tribute to His Excellency, said all the development plans and programs that have or are being implemented all his ideas and aspirations. The State has been very lucky to have a leader like him, who is not easy to find.  Sarawak or Malaysia for the matter is indeed very lucky to have Tun Pehin Sri Abdul Taib as a leade.

He has served his country well. He has served the people, state and country brilliantly as the post Independent Cabinet Minister during the time of Ningkan(Tan Sri Datuk Amar Stephen Kalong NIngkan, the first Chief Minister)  as the Minister of Communications and Works,  the Minister of Forestry and etc.

He served in the Federal Cabinet for 13 years serving in various capacities including the Minister of Primary Industries, Minister of Defence, Minister of Information and Broadcasting, Minister of General Planning and Socio-economic research and the Minister of Federal Territories.

Datuk Patinggi Adenan used to say he is the man of all seasons like a renaissance, whose knowledge is not only deep but very wide.  Talking to him is an education by itself.  That is the mark of the man. The people, who have the opportunity to talk to him on any subjects like history, politics or any other subjects, will learn something from what he has said. 

Borneo Medical Centre

Datuk Patinggi Adenan said he has known His Excellency for the past 50 years and to him Tun is the combination of the wisdom of Tunku Abdul Rahman (Tunku Abdul Rahman Putra Alhaj, the first Prime Minister), his adopted father, the dedication of Tun Razak (Tun Abdul Razak,the second Prime Minister)  the sincerity of Tun Hussein (Tun Hussein Onn,the third Prime Minister)  the commitment of Tun  Dr. Mahathir  bin Mohamed, the dedication of Najib(Dato Seri Mohd. Najib Tun Abdul Razak )  and the flair of P.Ramlee.   

He said he has never seen some one so crazy about a singer; he would sing P.Ramlee’s song while flying, he would sing P.Ramlee’s songs during dinners, he would sing P.Ramlee’s  songs before going to sleep; in other words,  he sings  P.Ramlee during whatever time he has for himself.   

He was the No.1 fan of P.Ramlee.   That was because of the soul, music and the harmony that His Excellency saw in P.Ramlee.  He believed His Excellency he was the first one to recognize the greatness of P.Ramlee. Other people realized the greatness of P.Ramlee as a musician, singer, actor and film director only after he had died.  

Datuk Patinggi Adenan said His Excellency is the man who reflects the soul of P.Ramlee. Those are the characteristics of the man of all seasons and the man who had the vision for the people, State and country.  He has ideas and aspirations for the people and the state.

Tanjung Manis Halal Hub

He started to know Abdul Taib 52 years ago in the year 1961 or 1962 while he was still in school preparing for the Senior Cambridge examination.  Then all senior secondary students used to gather on Saturday afternoon at  Sekolah Rakyat Abang Haji Bolhasan to listen to talks given by  Bumiputra graduates in those days.

Then on one Saturday afternoon it was Abdul Taib’s turn to give lecture to them. He did not know Abdul Taib before that. When he came some friends commented that he looked like P.Ramlee. They all agreed that his movements and actions resembled those of the late   P.Ramlee. 

He came with his Australian wife, who was locally referred to as Ma’am.  In those days when people talked about Ma’am, they all thought she came from England. She was tall and different from other Ma’am.  She came from Australia. She was an Australian of Polish decent and already a Muslim. 

Swinburne University Sarawak Campus
University Malaysia Sarawak (UNIMAS)

Datuk Patinggi Adenan recalled Abdul Taib came with his car Opel and they were all very impressed to see a foreign car being driven by a Malay.  All of them were very impressed by his talk. The other personalities who used to give lectures to them were Dato Abdul RahmanYa’akub (now Tun Datuk Patinggi Haji Abdul Rahman Ya’akub and  Safri Awang Zaidell, now Tan Sri Dato Haji Safri Awang Zaidell. 

Datuk Patinggi Adenan admitted at 17 years old he could not really appreciate the importance of subjects like history, education, nationalism and others. But later on when he  entered the University of Adelaide,  the same university as Abdul Taib, he realized the truth in all what Abdul Taib had been telling them about nationalism, the love of the state, the importance of education and knowledge.  

Then he realized that Abdul Taib, who looked very much like P Ramlee had a very high standard which he should follow.  He used to say Abdul Taib bin Mahmud was an inspiration for young people of his generation like a beacon on a hill to let them do better things in life. 

Sibu Lanang Bridge

He admitted it was very hard to follow his footsteps.  His first step to follow Abdul Taib was to study in the same university.  Even as a student His Excellency made a name for himself.  The lecturers in the university or judges in Adelaide, all knew that he also came from Sarawak.

He said every time he made mistakes the lecturers would tell him, Abdul Taib would not make such mistakes. They would compare him with Abdul Taib. It was a real disadvantage to him. 

Datuk Patinggi Adenan, now following the footstep of His Excellency as the fifth Chief Minister of Sarawak, said he could anticipate the problem as it was a real problem to fit into a bigger shoe. He has his own style and he needs time to do his work.   

He said the appointment of Tun Pehin Sri Abdul Taib as the seventh Yang di Pertua Negeri is most appropriate; it is right that he should be there. He should have the time to relax at his age and after serving the people, state and country with selfless dedication and huge sacrifices.  

Tun Salahuddin Bridge in Kuching
He said the people from all walks of life gathered in thousands to such an extent that both inside and outside the banquet hall were packed with the guests who wanted to show their thanks and gratitude to the paramount leader during the past five decades.

This was to show how much the people, comprising of diverse ethnic and religious groups love and respect Abdul Taib. It also reflected their sadness as he would no longer lead them as their political leader. 

However, they all consider his new appointment as the Yang di Pertua Negeri, as the   umbrella to protect them from the hot sun or from the rain. 

Datuk Patinggi Adenan thanked Datuk Amar Abang Haji Johari Tun Openg, the Minister of Housing and also the Minister of Tourism, who was the Chairman of the main Organising committee, for pledging on behalf of other cabinet Ministers their full support to him.  The responsibility of the Chief Minister is very heavy and the success hinges on team efforts. 

Sarawak Monitor
28 January 2015

Tuesday, January 27, 2015

No more State land for large scale oil palm plantation

The state government is actively considering of keeping 60% of the total land surface of Sarawak of 12.4 million hectares as permanent forest in accordance with the land use policy framework, which spells out ways in which all activities relating to forestry, agricultural and others are structured to achieve balance and sustainable development.

In essence the land use policy framework is designed to achieve high economic growth and at the same time protect the State’s natural land forms, biodiversity, natural resources and ecosystem services and mitigate local and global climate change.

Out of the total acreage, 6 million hectares are classified as permanent forest estates (PFE) and 1 million hectares as Totally Protected Area (TPA). The state government has already set aside 1 million hectares in the permanent forest estates for tree plantations, which are being and will be planted with fast growing species of trees.


A total of four (4) million hectares or 32% of the permanent forest estates is reserved for agricultural purpose (food security) while three (3) million hectares are earmarked for oil palm (estates and small holders). The areas are inclusive of NCR land, which by definition is agriculture area with the estimated acreage of 1.6 million hectares, . The total acreage of areas under the Provisional Lease (PL) is 2.5 million hectares. The areas are principally for oil palm estates.

Chief Minister, Datuk Patinggi Tan Sri Adenan Haji Satem, has already declared his intention to increase the area under forestry sector by at least 3% from the current 5.7% to 6%, which will enlarge the acreage of forests areas from 7 million hectares to 7.5 million hectares. 

He said there will be no more State land to be given out for oil palm plantation for a foreseeable future. The existing lands under the provisional lease and part of the NCR lands of 500,000 hectares are more than adequate for this purpose. .

He said the state government will progressively reduce log production, which it has been doing over the years, from the natural forest. At the same time, the state government will intensify efforts to plant 1 million hectares of planted forests areas with fast growing species of trees to feed the local timber industries.

In this connection, most of the needs of local timber industries will come from tree plantation areas in future. Thus there will be a corresponding decrease on reliance on the tropical timber from natural forest. This in itself will help to eliminate illegal logging in the natural forests.  

Datuk Patinggi Adenan said continuous efforts will be made to tackle illegal logging and smuggling of logs. However, cooperation and assistance from all sectors of the society are paramount and it is in fact a prerequisite to achieve success in this noble course.

Sarawak has a long history of exploiting the natural resources based on proper legislation in management and land usage. The practice incorporates the essence of economic, society and environment.  However, its outlook has changed as it has to respond to the needs and demands of the changing time.

Sarawak Rainforests from 2015 Google's Map Data

Actually, the State decided long before the ITTO Mission in the 1990s on how best to sustain and manage the forest resources.  Coincidently, the State’s decisions coincided with the recommendations by ITTO to make it easier for the State to move ahead the same path with the international organization.

Undoubtedly, environment conservation in the country, the State of Sarawak in particular, was given a new lease of life by Tun Pehin Sri Haji Abdul Taib Mahmud, who, since early 70s as the Minister of Primary Industries, shared the fears of conservationists that clear cut logging, for example, would turn Peninsular Malaysia into a timber importer in a decade.
As the fourth Chief Minister of Sarawak from March 26, 1981 to February 28, 2014, he implemented the policy to preserve over 50% of the areas as permanent forests, which would be something that few countries in the world could afford to do so. Of course, some of the areas would gradually be logged for roads construction and sites of hydro dams, as and when needed, in places like Ulu Kapit, Ulu Baram and Ulu Limbang.

The State has been giving priority to the conservation of natural resources and the state government is committed to achieve an ideal balance between environmental protection and economic development, especially after the 1992 Earth Summit.

Regrettably, the State government, the leadership in particular, was being criticized by foreign NGOs, which obviously had very little knowledge about Sarawak. Obviously, they wanted a cause to fight to qualify them to get fund from their sponsors including their own governments.

They carried out campaigns  against Sarawak to project it to the world where the people in the government abuse their forest resources; they rake them supposedly to make a lot of money for themselves. 

But this was far from the truth with State’s forest policy to preserve permanently more than 50%; in fact more than 54% of the forests areas remain permanently as forests. Out of these areas, the State reserves 1 million hectares for permanent forests as parks, water catchment areas, which cannot be touched at all.

The rest will be harvested on systematic basis or to allow the forest to grow in a circle of 50 years; the area can only be harvested after a cycle of 50 years.  Basically, the State’s forests policy is to ensure trees that are less than 25 years cannot be touched at all.  On that basis when the next 25 years come for the same forest area, the trees will be more than 50 years.  

Generally, forests in Sarawak are being looked after very well.  The State has been practising the sustainable policy, as recommended by FAO and ITTO or International Tropical Timber Organization, in exploiting the forest resources.  

Sarawak's Hill Mixed Dipterocarp Forest

Sarawak’s forest areas comprise of Hill Mixed Dipterocarp Forest with the total acreage of 9.69 million hectares (96,900 km sq); Peat Swamp Forest, 1.28 million hectares (12,800 km sq and Mangrove Forest, 93,000 hectares (9,300 km sq)

Out of the total, 710,884 hectares (7,108 km sq) are being conserved as totally protected areas as follows:   22 National Parks - 517,704 hectares (5,177 km sq); five Nature Reserves - 945 hectares (9.45 km sq) and four Wildlife Sanctuaries -192,235 hectares (1,922.35 km sq)

Currently, there are about 1 million hectares of land comprising the State land and the Native Customary Rights land have been cleared for palm oil plantations.  A further one million hectares are earmarked for future development.

However, the State government is committed to achieve the goal in a sustainable manner. Necessary steps are being taken to balance the establishment of palm oil plantations with reforestation programs.  

Understandably, an increase in demand for palm oil from overseas is fuelling the development of plantations in Sarawak, stimulating government subsidies to small land owners, regenerating many rural areas and providing employment for many local people.

Besides, the State government has been taking proactive activities to promote reforestation program among local timber industrialists.  For example, it has initiated programs, based on a long-term vision, to establish forest plantations in the State.  

Mixed dipterocarp forest composed of massive trees at Lambir Hills National Park, Sarawak

Ultimately, Sarawak will be able to reduce dependency on natural forest and make timber industry more sustainable and that the state’s biodiversity protected. The government is confident that in future, a large part of Sarawak’s timber production will come from forest plantations. 

Sarawak, since it started the Reforestation program in 1981, has been able to plant about 24,173 hectares (241.73 km sq) of deforested areas with Acacia mangium, Kelampayan, Sentang, Meranti, Durian and Rubber. 

Malaysia is being recognised as one of the 12 mega diversity nations in the world and Sarawak as one of the 25 biological hotspots. The State can boast of the following plant and animal species:

  • 247 species of trees – no other tropical rainforests anywhere in the world show such abundance and diversity of a single family of big trees 
  • 280 palm flora, representing 10% of the world’s total
  • 185 species of mammals in Sarawak
  • 10,000 – 12,000 flowering plant species in Borneo
  • 530 bird species in Borneo; and 154 snake species in Borneo

One of the most stupid things that foreign writers have been writing is blaming the so-called disappearance of Orang utan in Borneo to the excessive logging of forests in Sarawak. Obviously, they are very ignorant of the fact that Orang Utans can only be located in specific areas.

In Sarawak, they can be sighted at Lanjak-Entimau Wild Life Sanctuary, Batang Ai National Park and Ulu Sebuyau National Park.  These areas, gazette as totally protected areas, have total acreage of 250,000 hectares (2,500 km sq) or three times the size of Singapore. 

Besides, Sarawak has two wildlife centres each at Semenggoh and Matang for the study and rehabilitation of orang utans that have been found injured, orphaned or kept as illegal pets.

Contrary to what western writers, who have no business to poke their nose in the affairs of Sarawak, write about the local forests, they are well protected.  In this respect, the Forest Department Sarawak, established in 1919, is collaborating with other government agencies such as the Sarawak Forestry Corporation and Sarawak Timber Industry Development Corporation to ensure that the forests are well  maintained and preserved.

Sarawak Monitor
27 January 2015

Friday, January 23, 2015

Tun Abdul Taib was a leader ahead of his time

Sarawak, in the 60s and 70s was under developed and the economy was largely based on agriculture, forestry and mining. Then the economic activities were largely low value added; they could barely meet the basic needs of the rakyat.

The incidence of poverty was approximately 50.0% and the average monthly income per house hold was about RM580. The access to basic infrastructure and social impeded the expansion of economic activities.

Obviously, connectivity and accessibility, considering the big size of the State and the scattered population in rural areas, were the biggest challenges being faced by the Government in undertaking development activities. 

Tun Pehin Sri Taib during the early 60s

In 1980, Sarawak has only 15 Government hospitals and 165 doctors. Now, the situation has improved and the rakyat have better access to health services with 22 hospitals and 1,717 doctors. The quality of health services has also improved with better doctor to population ratio from one doctor serving 7,068 people in 1980 to one doctor serving 1,483 people in 2012.

The State’s road network has increased from about 5,000 kilometres in 1980 to 23,000 kilometres in 2013. The electricity coverage has also expanded from 34.0% in 1980 to 90.0% in 2013.

About 86.0% of the population has enjoyed treated water supply in 2013 as compared to 32.0% in 1980. Admittedly, there are still gaps in the provision of basic infrastructure between the urban and rural areas.

Sarawak, despite the slowdown in the global economy, continued to record positive economic growth at 4.2% in 2013; it is expected to grow at 5.0% this year. Sarawak is the third largest contributor to the Malaysian economy.

Old Bintulu Airport - 1955
Bintulu Airport - 2014

Reputable international and local rating agencies such as Moody’s Investors Services and Standard & Poor’s have been giving good ratings to Sarawak’s good economic performance.

Moody’s Investors Services gives A3 Stable Outlook and Standard & Poor’s A- Stable Outlook. Undoubtedly, these are good ratings that help to enhance investors’ confidence in doing business in the State. 

The State’s real GDP has increased significantly from RM3.5 billion in 1980 to RM75.0 billion in 2013. Over the same period, the GDP Per Capita has increased manifolds from RM4,066 to RM41,115. This is well above the National GDP Per Capita of RM32,984.  

With rapid economic growth, the value of trade has increased tremendously from RM6.3 billion in 1980 to RM147.0 billion in 2013. The balance of trade remained positive and increased substantially from RM1.7 billion in 1980 to RM68.7 billion in 2013.

The rakyat are now able to enjoy better livelihoods with more new business and employment opportunities. As a result of rapid economic growth, more and more employment opportunities were created.  This can be seen in the increased numbers of job vacancies from 374 in 1980 to 68,646 in 2012. 

Arguably, the unemployment rate was reduced from 5.8% in 1980 to 3.8% in 2013. The average monthly income per household has also increased from RM580 in 1980 to RM4,293 over the same period. Due to systematic and relentless Government intervention in poverty eradication, great success has been made.

Chief Minister, Datuk Patinggi Tan Sri Adenan Haji Satem in his recent speech during a mammoth rally and parade held in conjunction with the Yang di Pertua Negeri, Tun Pehin Sri Haji Abdul Taib Mahmud’s 78 official birthday, said the socio-economic landscape started to change with increases in development momentum when Tun Pehin Sri Haji Abdul Taib Mahmud, then Datuk Amar Haji Abdul Taib Mahmud,   took over the helm of the State leadership as the Chief Minister on March 26, 1981. 

Old Kuching Waterfront

Kuching Waterfront

A total of 114 contingents, representing uniformed and non uniformed organisations including youth, cultural and welfare bodies, community associations, government departments, statutory bodies, Institutions of higher learning, Police and the Army, were mounted during the parade, the biggest ever held for any events.  

Under his leadership from March 26, 1981 to February 28, 2014, Sarawak achieved success by leaps and bounds in all aspects of development, be it physical, economic and social.  The progress made has benefitted the Rakyat be they in urban or rural areas.

Undoubtedly, the success of Pehin Sri Abdul Taib’s Politics of Development has brought about political stability, rapid economic growth, prosperity, social harmony and unity among the various ethnic groups. 

The implementation of Politics of Development, to address both the development issues and challenges, emphasises on the socio-economic equity and changing the mindset of the rakyat so that they could effectively participate in the process of development.

Datuk Patinggi Adenan, in paying a glowing tribute to Tun Pehin Sri Haji Abdul Taib said his predecessor was a leader ahead of his time. For example, he made tireless efforts in preparing Sarawak to face greater challenges brought about by globalisation, trade liberalisation, ICT and k-economy.

He initiated the development of Sama Jaya Free Industrial Zone for the setting up of high tech industries like the wafer fabrication plant and other sophisticated industrial plants in the zone. 

Bintulu LNG Port

Undoubtedly, the development of Sama Jaya Free Industrial Zone, which has successfully attracted many young talented Sarawakians working abroad to return and serve the State, has positioned it in the forefront of high tech electronic industries.

Datuk Patinggi Adenan, who served in various capacities in the State Government being led by Pehin Sri Abdul Taib, said the State Government has always been pragmatic in introducing several new measures to accelerate economic growth and development. These included the economic diversification policy that had changed the structure of the State’s economy from primary sector based on commodities to higher value - added manufacturing and service sectors.

Indisputably, many achievements had been made including the success of attracting more private investment and creating more new business and employment opportunities for the rakyat over these years. 

Datuk Patinggi Adenan said the incidence of poverty has been reduced drastically from 47.8% in 1980 to 2.4% in 2012. Obviously, the Government is committed in addressing this issue through the continued implementation of the various poverty eradication programmes.

Flying Doctor Services to Sarawak rural areas

He said the Government, with political stability, strong economic foundation and social harmony, had been able to plan and implement more development programmes including the provision of health and education services to the rakyat. 

 He said a lot of efforts have been made to improve the quality of education in the overall efforts to develop the human capital, which is one of the pillars in the country’s development in the State. Obviously, the efforts have produced encouraging results as manifested in the better teacher to student ratio in the secondary schools from 26 in 1980 to 14 in 2012. 

He believes Sarawakians, with the presence of 110 institutions of higher learning including technical colleges, are enjoying better access to tertiary education including opportunities to further their studies in the branch campus of foreign universities.

He said rural transformation will be one of the key thrusts of the State’s Eleventh Malaysia Plan. The State government under him remains committed to address the gap between urban and rural development. Hence, it will work closely with the Federal Government to ensure success in bridging the gap.

Datuk Patinggi Adenan said his predecessor’s wisdom in realising the potentials of water, with Sarawak being blessed with many rivers and plenty of water, has brought about the systematic development of hydro dams to generate electricity to attract energy intensive industries.

This idea has led to the formulation and subsequent implementation of Sarawak Corridor of Renewable Energy or SCORE, which is of a long - term development plan to propel Sarawak to become a developed and high income State by 2020. 

Satok Flyover
Kenyalang Interchange

He said SCORE continues to make good progress. More investors have expressed their interest to invest in SCORE. The State has been successful in attracting many trigger projects such as aluminium smelting, ferro alloy, polysilicon, metallic silicon and chemical industries.

The development of trigger industries has better positioned Sarawak to attract supporting industries including local Small and Medium Industries. The establishment of both trigger and supporting industries augurs well with the plan to develop clusters for the respective industries.

Datuk Patinggi Adenan said 19 projects, which are expected to create more than 16,000 direct job opportunities, have been approved in SCORE with total investment of more than RM32.0 billion. Samalaju Industrial Park continues to be the main attraction.

He said 15 projects with a total investment of more than RM27.0 billion have been approved in the Park. The remaining four projects with investment worth more than RM5.0 billion are located each in Mukah, Tanjung Manis and Kidurong. This reflects the confidence of investors on SCORE as an attractive investment destination in the region.

Datuk Patinggi Adenan assured the timely provision of social and basic infrastructure in Samalaju Industrial Park. The construction works related to Samalaju New Township, Hotel, Service Centre, Samalaju Port and other industrial infrastructures are progressing well.

He believed SCORE has provided Sarawak with the foundation for industrialisation for it to prosper in the years ahead. Therefore, the State government has decided to go along the path of industrialisation towards the year 2020 and beyond.

However, the establishment of trigger or even downstream industries demands the availability of technical and skilled manpower. Therefore, young people must take up technical training to meet such demands.

Sarawak Monitor
23 January 2015 
Photo Source: Google

Wednesday, January 21, 2015

Negotiation on oil, gas royalty, progressing well

The issue of petroleum royalty, which is close to the hearts of every Sarawakian, will continue to be part of the State’s continuing negotiation and discussion with the Federal Government with the State government’s commitment to develop Sarawak, like any other states, to attain the status of high income economy towards the year 2020 and beyond.

The State government is negotiating with PETRONAS to increase the petroleum royalty to 20% and the negotiation, which is a manifestation of the Federal government and PETRONAS’ commitment towards achieving the petroleum royalty resolution made by the State, is progressing well.

Chief Minister, Datuk Patinggi Tan Sri Haji Adenan Haji Satem, in his winding speech on the debate on Budget 2015, said he has been assured by the Prime Minister, Dato Seri Mohd. Najib Tun Abdul Razak that the Federal Government is seriously considering the royalty request by the State Government by increasing the cash compensation in lieu of oil and gas; the funding will be done through the development plans.

He said the Federal and the State governments will set up a committee consisting of high officials between the Government and PETRONAS to work out on how they can assist Sarawak either by increasing the rate of royalty or other means which amount to the same thing. 

He said there will be a review of the royalty rate but the Prime Minister has informed him that it would take time to figure out how best it could be worked out. This is the stage of the negotiation, which is not being finalized; it will continue on and on.

Datuk Patinggi Adenan hoped that he would be able to make the announcement on some concrete results of the negotiations perhaps in the next May or June sittings of the State Legislative Assembly. Hopefully, he would also be able to make another announcement or event during the Budget session in November 2015.  

He said the State government and PETRONAS have also agreed to work on five key areas, each through a sub-committee, to enable Sarawak’s participation in the oil and gas industry namely:
  •   Natural gas supply for both power and non power sectors;
  •   Human resource, education and technical training;
  •  Contracts and business opportunities;
  •  Equity and royalty; and
  •  Corporate social responsibility

He believed the five key areas of cooperation will create the optimal impact to accelerate the State’s socio-economic development and improving the livelihood of the people of Sarawak.  For this reason, Sarawak wants to be a participant in the oil and gas industry. It does not contend simply to be expected data while other people take away its oil and gas;   the State wants to have meaningful participation in key areas.

He said PETRONAS initial responses are as follows:

  • To allocate 10.0% equity in the MLNG Plant Train 9 in addition to the current 5.0% equity in LNG1 and 10.0% each in LNG2 and LNG3. The 10.0% equity in LNG4 has to be paid by the State.  But 10.0% equity in LNG4 is a sure fire project, which will yield an income for the State four or five years later. It will be taken out above potential dividends at the end of four to five years. The State can look forward to billion worth of dividends from LNG4 just like LNG1, LNG2 and LNG3. 
  •  To allocate 280 million standard cubic feet per day of natural gas to power and non-power sectors.  The agreement is for Petronas to provide Sarawak with gas to produce electricity and other purposes to the tune of 280 million standard cubic feet per day.
  •  To allocate a baseline value of RM2.1 billion worth of contracts to Sarawak companies, which are owned by the local people with directorship and shareholdings all Sarawakians. The people are no longer interested only in fronting for west Malaysian companies. 

Datuk Patinggi Adenan said PETRONAS will set up offices in Kuching, Bintulu and Miri on licensing and contractual matters to organize licensing and tendering clinics and to allow contractors registered with the State’s Unit Pendaftaran Kontraktor (UPK) to participate in tenders subject to PETRONAS requirement.

They will undertake to spend about RM420 million for capital and operating expenditures on education and technical skills trainings during the period. Besides, they will spend a minimum of RM50 million over five years as Corporate Social Responsibility (CSR) on community projects, emergency aids and environmental programs.  They will allow us to choose the project that they will spend their money on. 

Sarawak has the society for the blind, society for the deaf, autistic children and others, which need welfare assistance in the services of the less - fortunate people. Petronas allows the state to identity the areas for this purpose. 

Datuk Patinggi Adenan said, having confirmed the State Government’s capacity to implement the SCORE Development Plan, the time is right for the people to receive an immediate return on their investment.

The State Government will revise downward electricity tariffs for all domestic customers in the State effective from 1st January 2015. This revision is downward. For a change, something is going to be cheaper than it usually is. For this purpose, the State government has carefully designed the tariff revision to provide the greatest assistance to low income customers.

He said the highest reduction will be in the lower group. As they go up, it will be less and less. As a result, almost 60,000 customers will join the 70,000, who are already eligible for the Federal Government’s RM20 subsidy. This means that approximately 130,000 low income customers in Sarawak will receive a zero monthly bill.

He said about 80,000 customers, presently consuming between 200 and 300 units per months, will get a reduction in tariff of just below 20%. The 50,000 consumers presently consuming between 300 and 400 units per months will benefit from a reduction of around 10%.

The final 250,000 customers, with the largest monthly consumption of more than 400 units, will get a reduction of between 2% and 4%. Therefore, in total, 240,000 customers or close to 50% of SEB’s customers will benefit from a tariff reduction of between 20% and more than 40%.

He said the revised tariff structure is deliberately aligned with modern tariff principles whereby the tariff rises with electricity consumption. This represents good social policy for offering the lowest prices for low income consumers and also to promote a green philosophy by encouraging efficient electricity consumption.

Datuk Patinggi Adenan said the State government is able to reduce tariff because of good management of financial resources and reduce the volume of electricity thefts, which used to incur billion worth of financial losses. Sarawak Electricity Board has been able to enforce stringent measures to curb electricity thefts.  But SEB will continue to need cooperation from people in catching the perpetrators, who sometimes sell devices on how to make the meters run slow. 

He hoped to be able to make an announcement on tariff reduction for industrial and commercial users at the next sitting of the State Legislative Assembly.  With Murum hydro dam on stream, production cost for a single unit of electricity is reduced so the hydro electricity will benefit all electricity users in the end. There is a connection between the hydro dams and electricity tariff reduction.

Datuk Patinggi Adenan said some people, who oppose the development of hydro dams are actually denying the people their right to have reduced electricity, which serves the majority of people. In relation to tariffs, there are very few countries, which have been able to maintain the same electricity tariffs since 1992, in the world.  Generally, the people should be proud of the fact that electricity tariffs in Sarawak are already the lowest in Malaysia and among countries in the ASEAN region.

Sarawak Energy Berhad (SEB), over the past several years has signed 12 Power Purchase Agreements (PPA) with bulk customers for a combined load of 2,570 megawatt.  It has also signed another PPA with Comtec Solar International (Malaysia) Berhad with total investment of RM1.2 billion. The company has the capacity to create about 1,300 jobs at its solar wafer manufacturing plant in Sama Jaya Free Industrial Zone, Kuching.

Datuk Patinggi Adenan said the commissioning of Murum hydro-electric plant, now well underway, will provide clean, renewable and affordable power to Sarawak for many decades to come. SEB has signed a major contract for the construction of Balingian Coal Fired Power Plant.

The electricity board is making steady progress on the construction of the 500 kilowatt State Transmission backbone.  Besides, SEB is investing more than RM400 million in the development of new transmission and distribution infrastructure to cope with the rapid growth of Miri.

Datuk Patinggi Adenan said the State government would give an initial allocation of RM3 million for Chinese Education to support them in the further development of Chinese Schools and their Unified Examination Certificate. The State will continue to work closely with the Federal Government in education, which is under Federal Government jurisdiction, in order to meet the objectives of the National Education Policy.

The policy dictates that all education systems must be in line with the National Education Policy in providing education to all people to enable them to contribute more significantly to the welfare, integration, harmony and development of the State and country. 

The State is prepared to chip in at least RM3 million for Chinese education, though it is a Federal responsibility, for a start. It will consider providing at least RM3 million for the purpose every year. 

Datuk Patinggi Adenan said he had spoken to the Deputy Prime Minister, Tan Sri Muhyiddin Yassin, who is also the Minister of Education with regard to the recognition of Unified Examination Certificate by the Federal Government. He said it could be done provided the Independent Schools are prepared to adjust their curriculum in order to have elements of national unity element in it.   

Undoubtedly, Sarawak has been progressing by leaps and bounds but continuous efforts  must be made to further accelerate the pace of progress in order to attain the status of high income economy or a developed State by 2020.

Datuk Patinggi Adenan said the State government is committed to see all Sarawakians should be able to enjoy the success of a high income and developed State by the year 2020; no Sarawakians should be left out in this matter. The joy and fruits of success are meant for all people irrespective of locality, race and religion.

He said the people are the centre of everything in whatever the Government plans to do and deliver and deliver to them. The peoples’ interest is paramount in discharging the responsibilities of pushing for greater development and progress.

The government is here to serve the Rakyat. Only then it can deliver the right goods and services to them efficiently and effectively. Therefore, it must listen with an open heart and mind to understand their needs correctly.

He said the State economy, being the third largest in the country, contributes about 10 percent to the National economy. Sarawak has good credit ratings, which make it an attractive investment destination.  However, being the biggest State, it has to face more challenges. It is still lagging behind in terms of infrastructure development especially in rural areas.

Sarawak Monitor
21 January 2015