PUTRAJAYA has decided to not go ahead with the China-backed Trans-Sabah Gas Pipeline(TSGP) project, despite successfully renegotiating the East Coast Rail Link with Beijing.
“We have determined that the pipeline will not be constructed but we are as usual not sticking directly to previous arrangements etc,” said Prime Minister Dr Mahathir Mohamad.
“At the moment we are not going to construct the pipeline,” he told reporters at a press conference in Putrajaya.
Last year, the Pakatan Harapan government suspended the ECRL and two oil and gas pipe projects – TSGP and the Multi-Product Pipeline – that were approved by the Barisan Nasional government.
It was reported that RM3.5 billion, or 88%, of the RM4.06 billion TSGP had been paid to the China contractor despite only 13% of the work done and no pipelines laid.
The two pipeline projects are worth RM9.4 billion, and were awarded to China Petroleum Pipeline by the Finance Ministry-owned Suria Strategic Energy Resources Sdn Bhd (SSER).
The TSGP is a 662km gas pipeline from Kimanis Gas Terminal to Sandakan and Tawau.
Gas from the west coast would be transferred through the pipelines to power a 300MW electricity plant in Sandakan.
Dr Mahathir today said the government has no qualms about awarding mega projects to China companies, but the priority should be to local firms.
“If there are projects to give to the Chinese we will but our policy is to give mega projects to Malaysian companies (but) if they done have the expertise they can call in foreign companies to join.”
THE MALAYSIAN INSIGHT