Transforming Sarawak’s rural areas

Transforming Sarawak’s rural areas
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A visit to a longhouse or a village in the interiors of Sarawak will enlighten one on the lifestyle of the people in the rural area.

Some are farming and selling their crops to make a living while others are working as labourers in the mining, oil palm, construction and timber sectors in a small town or ‘pekan’ to sustain their livelihood and support their families.

Normally, the men are the breadwinners of a family while the women will take care of the household chores and their children.

Some women will also support their families by bringing harvested crops and produces such as vegetables from farm to sell at the markets in nearby towns.

The hardship of living life in rural areas has prompted the people to yearn for better infrastructure and utilities to improve their welfare and enhance their lifestyle.

In fact, some people living in rural areas still require basic necessities such as clean water and electricity supply to live a more comfortable life.

Meanwhile, houses in some rural areas are in dilapidated conditions and in need of repair while certain schools in the rural areas require better facilities.

Imagine living in those conditions for a very long time – how will a person feel and what will become of their future?

Indeed, those living in cities and urban areas are very fortunate and blessed.

A volunteer worker who used to send goods to the less fortunate living in the rural area lamented,  “Do you know that children in the rural areas have to take a long journey which took them hours to reach school?

“Some families living in the rural areas don’t even have enough food on the table and it is a challenge for certain families to make ends meet.

“Besides, traveling from one place to another in a particular remote area can only be reached by riverine transportion,” he recalled.

Pointedly, people living in rural areas need better facilities and support and conditions can only be improved with better infrastructure and socio-economic development.

As Sarawak gears towards becoming a high-income state in the near future, the state needs a more balanced development with emphasis on rural areas.

This will provide people especially those living in the rural areas with greater opportunities to participate in economic activities and gain higher income to improve their livelihood.

Realistically, before even talking about achieving high-income, the people throughout the state must be able to live an independent life with basic needs made available to them.

It is high time for Sarawakians living in the rural areas to be provided with the right infrastructure and public utilities to transform their livelihood as well as getting better healthcare.

This is also in tandem with the state’s aspiration to move towards a high-income state by 2020.

The blueprint for transformation 

During the recently concluded state assembly sitting, Chief Minister Datuk Patinggi Tan Sri Adenan Satem announced that the state government has earmarked rural transformation as one of the key thrusts in the state development agenda.

He said, “Our Rural Transformation Programme is holistic in nature, encompassing various components such as basic infrastructure, socio-economic programmes, private investment, development of new towns and service centres and the development of human capital.

“However, attracting private investment to the rural areas is a daunting task unless the basic infrastructure especially roads are first put in place to provide accessibility and connectivity to these areas.

“For this reason, the Government has formulated a Master Plan that will guide and enable us to accelerate the development of the rural sector systematically,” Adenan said during his winding up speech.

He pointed out the proposed plan among others has outlined the provision of huge investment opportunities, putting in place the required infrastructure and huge funding that is necessary.

Adenan observed the Rural Transformation Programme will involve the development of coastal areas and will cover the interior areas for instance Bakun, Murum, Bengoh, Baram, Tunoh and Baleh.

He explained the development of hydroelectric power projects (HEPs) and reservoirs in those areas will be carried out systematically these will serve as catalysts to stimulate development.

“We are expecting more private investment to come to these areas simply because we have constructed the roads linking some of these areas,” he envisaged.

Private sector participation  On November 19, Press Metal Bhd, one of the companies operating at Samalaju Industrial Park (SIP) announced that it has committed to invest for another aluminium smelting plant at Samalaju, Bintulu to further boost its capacity production.

Without disclosing the additional capital to be invested, the company said the new plant is expected to cost less than the amount the company spent to build Phase 2, even though Phase 3 has a similar capacity.

Press Metal explained that Phase 3 will be sharing some common facilities that are already in place in Phase 2 while it was reported that Phase 2 was expected to cost an estimated US$600 million.

Additionally, the aluminium products manufacturer said as part of its expansion plan, it expects to double its smelting capacity for aluminium ingots in Samalaju to 640,000 tonnes from 320,000 tonnes in order to meet the increasing global demand.

Press Metal perceives the additional capacity is positive for the group in a long run as aluminium consumption is anticipated to grow exponentially, driven by the increasing usage of aluminium in the automotive industry and higher exports arising from the recovery of the US economy.

The company also observed the demand for aluminium products has outweighed supply at present.

Press Metal also expects the expansion of new capacity will have a positive impact to the future earnings of the group when realised.

Press Metal group chief executive officer Datuk Paul Koon said, “Press Metal’s further investment in SCORE will create more jobs and business opportunities for the people in Sarawak.

“The company expects the expansion of new capacity will have a positive impact to the future earnings of the group when realised,” he said.

On the same day, Press Metal inked a power supply term sheet with Sarawak Sesco Bhd, a wholly-owned subsidiary of Sarawak Energy Bhd (SEB) for additional 500 megawatt (MW) of power supply to be utilised for the proposed Phase 3 Smelter.

The company foresees its total smelting capacity will increase to 760,000 tonnes, which is approximately 1.5 per cent of global production, upon full commissioning of its new aluminium plant.

Zooming into SIP, one of the busiest growth nodes among SCORE and a centre for heavy and energy intensive industries, the Samalaju growth nodes had seen more than RM28 billion of approved investment to date since operational and has created more than 13,000 jobs.

Among the players who are there include Tokuyama Malaysia Sdn Bhd which has polycrystalline silicon manufacturing facility; Pertama Ferroalloys Sdn Bhd and Sakura Ferroalloys Sdn Bhd (a tripartite joint venture of Assmang Ltd of South Africa, Japan’s Sumitomo Corp and Taiwan’s China Steel Corp) for two manganese smelting plants which are currently under construction and OM Materials (Sarawak) Sdn Bhd’s ferroalloy smelting plant.

Besides, Cosmoc Chemicals Bhd (Cosmoc), an affiliate of Al Jubail Industrial City, Saudi Arabia’s Project Management and Development Company has signed a technology license and major equipment supply contract with GT Advanced Technologies Inc earlier this year for a new polysilicon facility being built in SIP.

As for home-grown players Cahya Mata Sarawak Bhd (CMS), the company said it is partnering with several parties to build Southeast Asia’s first integrated phosphate complex in Samalaju at an estimated cost of RM1.04 billion.

CMS group managing director Datuk Richard Curtis said, “The complex is the first of its kind in Malaysia and Southeast Asia and is the first non-metal or alloy-based plant in SIP, thus taking SCORE and CMS into a dynamic new industrial sector that offers long-term sustainable demand growth,” he said.

Similarly, CMS through its subsidiary Samalaju Properties Sdn Bhd is developing several properties there.

According to the company’s web portal, the development includes Samalaju Eco Park, Tanjung Samalaju Resort Hotel, Samalaju Light Industrial Estate, Samalaju Central – a service centre for small and medium-sized businesses and Samalaju Lodge for employees working at SIP.

In a joint development, CMS together with Naim Holdings Bhd (Naim) and Bintulu Development Authority (BDA) will also be undertaking township and housing development at SIP.

The parties involved revealed that they are working to provide housing for the general and executive workers in Samalaju with the project to be conducted in several stages.

Aside from that, marine engineering and construction firm Hock Seng Lee Bhd (HSL) is undertaking several infrastructure works, road projects as well as Sungai Samalaju raw water intake worth millions in SCORE.

Other than that, power cables and transmission manufacturer Sarawak Cable Bhd (Sarawak Cable) is undertaking the local portion of the Balingian coal-fired power plant work in the Mukah division for RM493 million.

Harnessing power   Shifting to power supplies and energy potential in the state, the latest Balingian coal-fired power plant to be built is one of projects developed by Sarawak Energy Bhd (SEB).

The company revealed that the power plant has the capability to generate 600 MW of electricity when it comes on stream in 2018.

SEB chief executive officer Datuk Torstein Dale Sjotveit believes the Balingian power plant would help enhance the state’s power grid system, particularly to meet the demand from SCORE customers.

He said, “With an adequate and stable supply (of electricity) in place, we will be able to further convince investors to bring their businesses here to Sarawak to strengthen the state’s economy.

“We are having multiples discussions with potential new investors who would choose Sarawak as their preferred destination for their business operations and we anticipate encouraging response from more energy intensive industry players in time,” he observed.

At the same time, Second Planning and Resource Management Minister Datuk Amar Awang Tengah Ali Hasan was reportedly said the demand for energy in the region recorded a steady increase of three per cent to four per cent a year.

For Sarawak, he pointed out that there would be an expected rapid growth in power demand from 1,250 MW to more than 5,000 MW by 2020.

He explained the rapid growth will be attributed to the large demand from the committed and future energy-intensive industries expected to set up within SCORE and the increase in local domestic, commercial and industrial organic customers.

He added with the power generation to be fully developed to meet the demand in 2020, the generation mix was expected to comprise 60 per cent hydro, 20 per cent coal and 20 per cent gas.

“The construction of a new power plant in Balingian will also open more opportunities especially for the locals.

“Their income is expected to improve with the growth of businesses in Balingian as the economic activities increase.

“The Balingian coal-fired power plant will also trigger socio-development in terms of generating job opportunities in the semi-skilled and skilled professions,” he said.

Besides power plants, SEB is developing hydroelectric power projects (HEPs) through the building of more dams.

After the 944 MW Murum hydroelectric dam, SEB is going to proceed with  the development of Baleh dam and the Baram dam with installed power capacity of 1,295 MW and 1,200 MW respectively.

The state power utility provider is also working on the proposed construction of Limbang HEP, Trusan HEP and Lawas HEP which are under review.

Other than that, SEB will continue to develop more power stations, sub-stations and power transmission lines to provide constant electricity supplies to the increasing business community and industries as well as residential areas.

This will enable the state to realise its energy potential particularly renewable energy and spur the economy towards higher growth in the future.

Given that, the state require more funding to push on with those development.

Recently, the state government tabled a budget which focuses more on rural development.

More funding  Adenan said, “More than 50 per cent of the development allocation of the proposed budget is for implementing programmes and projects in the rural areas to ensure long term balanced distribution of development throughout the state.

“This is in line with the state’s continuous efforts to narrow the development gap between the urban and rural areas,” he said in his budget speech.

Adenan, who is also the Finance Minister said RM408 million would be allocated for public utilities, especially for the expansion and upgrading of water supplies, including those in the rural areas.

He revealed that the state government will be seeking more funds from the federal government to finance infrastructure projects such as roads and utilities particularly in the rural areas.

He noted the capital expenditure required for implementing projects such as providing accessibility and upgrading of roads, supplies of electricity, treated water and other public amenities in the rural areas are substantial.

Datu Ismawi Ismuni, director of State Planning Unit (SPU) under the Chief Minister’s Department echoed Adenan’s remarks on getting more funds from the federal government to develop rural areas adding that it is crucial for the next stage of Sarawak’s economic growth.

He said the state government also hopes more funding from the federal government in the upcoming 11th Malaysia Plan (11MP) to be presented next year which will enable the state to implement more projects especially in the rural areas to propel the state’s economic growth.

“The rural community must also be developed in the right manner with focus on the socio-economic transformation.

“Right now, the bottom 40 per cent of low household income is in rural sectors and we are still lagging behind.

“We have to address income disparity throughout the state,” he said during an event recently.

Citing a scenario and using statistics from last year as comparison between the country and Sarawak, he said the average household income for Sarawak is RM4,293 a month whereas for the whole of Malaysia it is about RM5,000 a month despite Sarawak having a higher gross domestic product (GDP) per capita.

Likewise, Malaysian Institute of Economic Research (MIER) executive director Dr Zakariah Abdul Rashid said that the medium wage in Sarawak is lower despite having higher productivity.

The economist noted that although Sarawak was able to produce high-value added products, the state was unable to provide higher household income.

Ismawi observed that SPU is exploring ways to enhance the services sector to provide more value-added services.

He noted the state’s economy could not rely heavily on the agriculture sector for growth and called for more private investments to develop new engines of growth.

Thus, Ismawi stressed that developing rural areas is the key point towards moving Sarawak’s economy up the value chain.

He explained that more allocation from the Federal Government will allow the state to carry out the Sarawak Socio-Economic Transformation Programme (SETP) starting from 11MP.

11th Malaysia Plan For that, Ismawi said the state government has outlined six major thrusts for 11MP for Sarawak to achieve high-income and advanced state by 2020.

Ismawi during a briefing said those are re-strategising economic growth, strengthening growth enabler, speed up development in the rural areas, sustainable environment and resource management, human capital as the catalyst of growth and enhancing the quality of life of Sarawakians.

He said each thrust is divided into several initiatives and key areas.

For instance, he noted to speed up development in the rural areas, Rural Growth Centres and Rural Transformation Centre (RTC) must be set up as well as efforts aimed at poverty eradication.

In the meantime, Rural Development Minister Datuk Patinggi Tan Sri Alfred Jabu recently said the state’s first RTC in Bekenu town is expected to be operational by January next year.

Jabu pointed out that once operational, the RTC will provide various services by government agencies and the private sector besides having centres for tourism, food outlets and entrepreneur training.

“Nine government departments and agencies will operate at the RTC, namely National Registration Department, Health Department (Dental Clinic), Welfare Department, Community Development Department (Kemas), Malaysian Palm Oil Board (MPOB) Miri branch, Malaysian Fisheries Development Board (LKIM) Sarawak branch, Subis District Council, 1Malaysia Information Kiosk and Jobs Malaysia and Agro Bank,” he said.

Apart from that, Ismawi said to further stengthen the economy, growth enablers such as information, communication and technology (ICT) infrastructure, utilities, roads and airports are among a few infrastructure which must be built.

He also observed SCORE has been formulated to serve as strategic initiatives to complement the state’s economic agenda.

Similarly, Regional Corridor Development Authority (Recoda) chief executive officer Tan Sri Datuk Amar Wilson Dandot disclosed that Baram, Tunoh/Baleh have been identified as the next growth nodes to be developed under 11MP.

“These two growth nodes will definitely be implemented under the 11MP.

“The detailed plans are being worked,” he explained.

He added that the Baram growth nodes would be implemented first before moving on to Tunoh/Baleh.

Wilson observed that besides energy generation from the Baram Dam, other economic activities would include eco-tourism, biomass and agriculture.

He revealed that since the SCORE began its operations some four years ago, the economic corridor has managed to attract some RM37 billion worth of investment.

Wilson also revealed that the SCORE has been able to provide approximately 18,000 job opportunities to the local people in Tanjung Manis, Mukah and Bintulu.

Empowerment through SCORE Whilst the SCORE is progressing well, the state government is going to increase the pace of development in SCORE areas.

Adenan said efforts will be made to further develop the Samalaju Industrial Park (SIP) with the development of a service centre and a new township.

Going forward, he revealed the state government’s next move is to attract downstream players to invest in the SCORE.

“In years to come, we are expecting the development of industrial clusters.

“Therefore, our next step is to attract downstream industries to invest in the SCORE especially at SIP.

“The success in attracting these downstream industries is important as they are involved in higher value added activities and are able to generate good paying jobs for our people,” he said.

Earlier last week, Adenan witnessed the signing of a Memorandum of Understanding (MoU) between Hock Lee Group and Biochemtex Agro to establish a hub for biomass-based industries which could likely be within the SCORE area as one of the many steps to attract more downstream players to Sarawak.

Hock Lee Group’s chief executive officer Yek Siew Liong who is also Brooke Renewables Sdn Bhd’s chairman was reportedly said the first bio refinery will speed up action in attracting further downstream activities including biofuel, synthetic power and other specialty biochemical companies to Sarawak.

“The creation of these new industries will be a game changer in rural transformation and technology development.

“As one of the first proposed projects of its kind globally, we hope to maximise our headstart, hone our homegrown talents and maintain our lead by promoting best practises throughout this endeavor.

“Today we have the opportunity to position Sarawak as the centre of excellence in sustainable agriculture and set the standards for advanced biofuels and biochemicals,” he said.

It is believed that the industries for biomass is capable of contributing additional revenue of RM20 billion a year to the state and potentially provide more than 10,000 high value jobs for the people.

Adenan also pointed out earlier that the SCORE Plan includes the development of the hinterland such as Murum, Tunoh, Baram and Baleh noting that the road to Murum hydroelectric power project (HEP) that provides good connectivity to those areas has been completed.

The Recoda, the agency tasked with overseeing and managing SCORE observed the ongoing development of the economic corridor will also be extended to secondary growth centres such as Long Lama, Semop, Selangau, Balingian, Bakun, Samarahan, Nangka Merit, Baleh and Murum in the future besides major growth nodes for instance, Samalaju, Mukah, Tanjung Manis, Baram and Tunoh.

Thus, giving better accessibility and connection, some local businesses operating in the SCORE areas have benefited from higher revenue attributed to more customers.

Business opportunities for locals  According to Recoda’s annual report, it noted some entrepreneurs operating within the SCORE area have claimed that their revenue almost doubled as more visitors and customers purchased their products.

Business owners have also observed the increase in their demand and orders for their products which generated more income to them.

A business owner in Mukah said, “With the SCORE, we can now see a more vibrant Mukah where new facilities are put in place, such as the new airport, Universiti Teknologi MARA (UiTM) and sports centre.

“For my business, we have experienced an increase in revenue – almost double, in fact compared to the past as more visitors come,” he said.

Another business owner in Kapit believes the community in Tunoh will also in the future benefit from the SCORE projects as Kapit is witnessing growth in its economy due to the development of SCORE such as expansion of roads which provides greater connectivity.

The Recoda highlighted the spillover effect of the SCORE development has benefited local businesses particularly small and medium enterprises (SMEs).

From the manufacturing of tebaloi, a local sago biscuit as well as gifts/souvenirs to the production of dried food products, it observed local businesses have actually prospered.

With more areas which are going to be developed in the future, certain areas which are used to be a quiet town will be booming with greater activities and business opportunities.

On another note, Adenan during his winding up speech in the last state legislative assembly said as part of the state government’s ongoing negotiation with national oil corporation Petroliam Nasional Bhd (Petronas) for higher petroleum royalty, Petronas has agreed to allocate a baseline value of RM2.1 billion worth of contracts to Sarawak companies which will be increased each year.

Given the positive feedback, local oil and gas players could have better chances of getting jobs from the national oil corporation.

New wave of development With the momentum of development gradually moving  faster, the economic potential within the SCORE will be further explored.

The research arm of Maybank Investment Bank Bhd (Maybank IB Research) in a report said there will be increasing construction opportunities with sustainable basic infrastructure work to be tendered out as other growth nodes will undergo further development going forward.

The research firm observed the construction of the new Mukah Airport will provide greater connectivity.

Recoda believes the new Mukah Airport will help companies in the SCORE become more efficient as it allows them to mobilise employees more effectively and efficiently to reach domestic and regional hubs by reducing travel times.

The Recoda added the new airport will also play a role in the development of tourism in the region.

Apart from airport, road connectivity will also be upgraded.

Maybank IB Research observed the of the Pan-Borneo Highway dual-carriageway will be kicking off next year while roads connecting to Kapit, Tunoh and Baleh are under construction.

The research firm believes among the companies to benefit from those development are CMS, HSL, Naim and TRC Synergy Bhd.

To recap, the Recoda in its website spelled out that the landscape within the SCORE area has an abundance of natural resources, including clean and safe renewable resources such as hydropower.

It added the corridor has 1.2 billion of known oil reserves, over 80 million tonnes of Silica sand and over 22 million tonnes of Kaolin of China clay, a key component of cosmetics and ceramics.

The agency noted the development plan for the SCORE which stretches to 2030 will also be concentrating on developing the energy sector and targets 10 high impacts priority industries that will support the development plan and provide downstream opportunities for small and medium enterprises (SMEs).

In a related matter, SPU observed the 10 priority industries are oil-based, aluminium, steel, glass, marine engineering, livestock, fishing/aquaculture, palm oil, timber-based and tourism industries.

The government agency noted those industries can be further enhanced for upstream or downstream operations.

Drawing examples, the SPU said for the aluminium industry, businesses can move upstream to operate aluminium smelters or venture downstream to produce aluminium end-products.

Furthermore, the SPU has identified various economic activities within the SCORE areas which has vast potential for development.

Those include aquaculture, tourism, forestry, pulp and paper industries, palm oil industry, rubber and biotechnology.

Therefore, when all the developments are being realised, rural folks will be able to enjoy better standard of living.

It is time that businesses and people working in the rural areas can gain higher income with more development in line with the state aspiration to achieve a high-income state in the next few years.

[Source: “Transforming Sarawak’s rural areas” published by BornePost Online]

Photo Credits: BornePost Online

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