Finance Ministry Reveals Muhyiddin Led Pn Revived Tsgp Pipeline Project

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The previous Perikatan Nasional (PN) government under former premier Muhyiddin Yassin had revived the Trans Sabah Gas Pipeline (TSGP) project, which was terminated by its predecessor Pakatan Harapan in 2018.
The matter was revealed in a parliamentary written reply by Finance Minister Tengku Zafrul Abdul Aziz, who was answering a query by Kota Kinabalu MP Chan Foong Hin on the status of Putrajaya's discussion with China on compensation for the cancelled TSGP and Multi-Product Pipeline (MPP) projects.
According to Zafrul, the decision to revive TSGP was made in a cabinet meeting on Feb 10.
"For information, the cabinet meeting on Feb 10 had decided, among others, that the TSGP project - which was cancelled through a cancellation notice dated Sept 6, 2018 - is to be continued.
"While for the MPP, further study and negotiations are being conducted with its contractor China Petroleum Pipeline Bureau (CPPB), to determine a clear way forward for this project," he said.

Finance Minister Tengku Zafrul Abdul Aziz
In his question, Chan had asked the minister to provide the latest details on the outcome of negotiations between the government and China on terms for cancelling the two pipeline projects.
In August 2018, then prime minister Dr Mahathir Mohamad announced that TSGP in Sabah and MPP in Malacca were cancelled, together with the East Coast Rail Link (ECRL).
The project was undertaken by Suria Strategic Energy Resources (SSER) - a fully-owned subsidiary of the Finance Ministry set up in 2016 for the sole purpose of overseeing the implementation of the TSGP and MPP.

The construction of TSGP and MPP were approved by the previous BN administration, who awarded the projects to the CPPB in November 2016.

The 662km TSGP would have stretched from the Kimanis Gas Terminal to Sandakan and Tawau. The 600km MPP, meanwhile, would have connected various petrochemical projects in Malacca and Port Dickson, Negeri Sembilan to Jitra, Kedah.
Negotiations with project owners

A total of RM8.3billion - 88 percent of the construction cost - was paid out for the two projects, despite just 13 percent of work completed.
SSER was fined for failing to comply with Bank Negara conditions in relation to the pipeline projects in 2019.
"Following the cabinet decision, several series of negotiation has been conducted between the Finance Ministry and SSER as project owner and CPPB, to find the best solution in order to continue this TSGP project, besides improving all issues that were raised before that led to this project to be cancelled," Zafrul said.
He assured that any decision on terms and conditions would first be taken to the cabinet before approval.
With both sides having agreed to continue the TSGP, the issue of compensation no longer arises, the minister added. - Mkini

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