State to ‘squeeze’ oil and gas resources if federal budget reduced

Abang Johari (centre) fielding questions from the press. He is flanked by Masing (left) and Julaihi.

By Geryl Ogilvy

KUCHING, March 27: The Sarawak government will not hesitate to increase the five per cent sales tax on petroleum products to fund its infrastructure development, if Putrajaya reduced its budget allocation.

Chief Minister Datuk Patinggi Abang Johari Tun Openg said the state has many mega infrastructure projects in the pipeline to improve road connectivity throughout Sarawak and open up its rural areas for economic growth.

The state government has allocated RM9 billion from the required RM11 billion budget to build its second trunk road and coastal road projects, which included the building of nine new bridges across Batang Rambungan, Batang Igan and Batang Lupar, among others.

“Since Putrajaya had backtracked on their promise to give Sarawak 20 per cent royalty on oil and gas, we decided to impose the five per cent sales tax on petroleum products that will provide the state an additional RM3 billion annually.


“If this is not enough to fund our infrastructure development, we will squeeze from our oil and gas,” he said when closing the “Seminar on Road Technology and Technical Manpower in Sarawak” here today.

Deputy Chief Minister Tan Sri Dr James Masing, who is also Infrastructure Development and Transportation Minister, as well as Assistant Minister for Coastal Road Datuk Julaihi Narawi, were present among 480 participants.

Within the next three to six years, Abang Johari said the state will focus on building roads in the Regional Corridor Development Authority (Recoda) areas, especially those under the Upper Rajang Development Agency (URDA) covering Kapit, Bukit Mabong, Belaga, Song and Kanowit.

The state will also continue with its plan to build three airports in Lawas, Tunoh (Kapit) and Spaoh (Betong) respectively which will be managed by the state government, he added.

“Our long=term objective is to create connectivity across Sarawak to open up the land for various economic activities, particularly agriculture and even tourism,” he continued.

Touching on the two-day seminar (March 26-27), Abang Johari highlighted the importance for stakeholders and construction players in the state to learn the latest technology to construct roads in the state, especially on peat soil.

Citing the quality of roads in countries such as Singapore, Sweden and Finland, which were mostly built on marsh land, the chief minister also emphasised the importance of road maintenance.

On another note, Abang Johari said the state will review the multiplier factor rates for engineering firms to be on par with the Peninsular Malaysia

The minimum multiplier factor for the state, which has not been reviewed since 2011, is currently at 1.7 for professionals and 1.4 for sub-professionals. This was considered low and difficult for engineering firms to break even.

The state is also willing to review the reimbursement for site allowance and supervision of soil investigation works to encourage frequent checks and monitoring by engineers at construction site.

In February, Association of Consulting Engineers Malaysia (ACEM) Sarawak branch appealed for the review of the multiplier factors for professionals to be at least 2.2 and sub-professionals at 1.85.

ACEM Sarawak also requested for the state to unify and adopt the Finance Ministry’s site allowances for professionals at RM950 per month and sub-professionals at RM800, compared to the current minimum of RM675 and RM535, respectively. — DayakDaily