Sabah BN MPs to bemoan RM2.4b oil hub deal

By Malaysian Insider 22 Sep 2010

Seeing a Sarawak company make off with a lucrative Sabah deal has put Anifah under pressure. — file pic
KUALA LUMPUR, Sept 22 — The RM2.4 billion job to build a fuel terminal in Kimanis has sparked widespread discontent in Kota Kinabalu, with the state’s Barisan Nasional (BN) MPs expected to publicly complain in Parliament next month about the contract given to a company linked to Sarawak Chief Minister Tan Sri Taib Mahmud’s family.

With little fanfare on September 1, Naim Holdings Bhd announced that Samsung-Naim JV, a joint venture between its subsidiary NCSB Engineering Sdn Bhd and Samsung Engineering Co Ltd, had won a contract worth US$766.39 million (RM2.40 billion) from Petronas Carigali Sdn Bhd to provide services for the Sabah Oil and Gas Terminal project (SOGT), one of the country’s largest infrastructure project.

“There is no reason why a competing bid from Sabah should not have been given the job. Why is a Sarawak company given a job in Sabah? This means more of the state’s wealth will flow out of the state,” an Umno MP from Sabah told The Malaysian Insider.

The MP did not want to be named but said he and his colleagues were now planning to take their grouses to Parliament when it convenes next month.

Other BN MPs polled by The Malaysian Insider also confirmed they were unhappy and would find it difficult to defend the coalition against expected criticisms from Pakatan Rakyat (PR).

The Najib administration will want to head off such a show of dissent from the east Malaysian state, considered one of BN’s “fixed deposits”, to ensure the ruling coalition stays in control of Putrajaya.

In Election 2008, BN won fewer votes than PR parties in peninsula Malaysia and remained in power largely due to support from Sabah and Sarawak.

Prime Minister Datuk Seri Najib Razak is understood to be considering calling early polls next year.

The Sabah and Sarawak could prove crucial in determining the country’s balance of power. It is understood that a Sabah joint venture had struck up a partnership with a China oil company to make a bid for the SOGT project.

Sources said the Sabah-China bid was at least US$50 million lower than that of the Samsung-Naim JV proposal.

The unhappiness in Sabah also comes amid speculation that the final cost of the project may double to nearly RM4 billion.

The national oil company had invited bids this year after a three year hiatus for SOGT’s engineering, procurement, construction and commissioning project.

The earlier invitation for bids in 2007 was pulled back due to “technical reasons.”

It is understood that the Kimanis MP Datuk Anifah Aman, who is foreign minister and a key member of the Najib Cabinet, is facing political pressure because the project was awarded to Naim.

Anifah had emerged in 2008 as the fulcrum of a movement within BN, from which Sabah and also Sarawak hoped to get some reward for offering the strong support the ruling coalition needs to stay in power.

The SOGT in Kimanis is being developed by Petronas as part of its Sabah-Sarawak integrated oil and gas project.

Besides the SOGT, a 500km Sabah-Sarawak gas pipeline is also being constructed from the SOGT in Kimanis to Bintulu.

The construction of the pipeline has already created some controversy with state opposition leaders objecting on grounds that Sabah’s wealth was being siphoned off to Sarawak.

The north Borneo island state has about 11 trillion cubic feet of gas and 1.5 billion barrels of oil in reserves.

It exported almost RM14 billion of crude oil last year which formed almost 40 per cent of all of the state’s exports. But oil and gas make up slightly less than one-tenth of Sabah’s GDP.