sabah development corridor

sabah development corridor _112
CHAPTER 5
Progressive Growth is Within Reach
sabah development corridor _113
CHAPTER 5
Develop Infrastructure and People as
Key Enablers for Sabah’s Growth
Sabah’s infrastructure to date has lagged behind the rest of Malaysia. This is largely due to
geographical challenges; it is a large state with an area of 74,000 km2.
The future of Sabah rests on the ability to enhance its hard infrastructure (roads, ports,
electricity, water and data connectivity) and soft infrastructure (human capital). These
represent the key building blocks for Sabah’s development. To this end, the SDC initiative
will focus on five key strategies for the state:
1) Connect Sabah
Upgrade the transport infrastructure by ensuring seamless connectivity of road, air, sea
and rail which will enable good transportation services for the tourism, agriculture and
manufacturing industries.
2) Power Up Sabah
Provide the state with sufficient and reliable electricity to enable industries to operate
efficiently.
3) Quench Sabah’s Thirst
Provide Sabah with quality water supply that can keep pace with increasing demand and
enable economic and social improvements.
4) Invest in Sabah’s Talent
Prepare the state for its knowledge-intensive industries spanning manufacturing,
agriculture and tourism through a strong talent pool to enable these sectors to develop
to their full potential.
5) Enhance Data Connectivity
Ensure that Sabah is prepared and able to keep abreast with ICT developments so that
the industry can remain competitive and the rural-urban digital divide can be narrowed.
While infrastructure is a major focus of the SDC, every effort will be made to ensure
implementation is carried out in an environmentally sustainable manner.
sabah development corridor _113
5.1
5.1.1
Transportation
Road Network
Sabah’s Eastern and Western Sub-Regions are well-connected in terms of the road network.
However, in 2005, 61% of all roads were still gravel and earth roads. The Central Sub-Region
is separated by the Crocker range and this forms a natural barrier to better road connectivity
between the Central and Western Sub-Regions.
At present the major towns of Kota Kinabalu, Sandakan, Lahad Datu, Tawau and Keningau
are not well inter-connected when compared to the road network in Peninsula Malaysia. This
is supported by the fact that there is a lower standard highway road that links distant towns
like Sandakan, Tawau, Lahad Datu and Semporna with Kota Kinabalu.
In 2005, Sabah had 1,428 km of federal roads and 14,249 km of state roads, out of which
6,094 km were sealed roads and the remaining 9,583 km were gravel and earth roads. This
indicates that only 38.9% of roads are sealed in Sabah compared to 89.4% of sealed roads in
Peninsula Malaysia. Within the implementation period of the SDC Blueprint, it is projected
that 80% of all these gravel roads will be sealed.
Furthermore, trunk roads constructed in the 1970s and 1980s under World Bank loans
were of sufficient standards at that time. However, given present requirements, there
is a need to upgrade these roads. For instance, the road pavement and shoulder width
(suitable previously) are now too narrow and inadequate to meet the demand of
present traffic volume.
In order to further develop the interior regions, the road network linking East to West and
North to South must be developed and further enhanced.
sabah development corridor _114
5.1.1.1
Challenges
Lack of connectivity is a key issue in Sabah at the moment. Insufficient and unreliable
connections between major towns themselves and to tourist attractions such as Maliau
Basin lead to opportunity costs. Also, it is difficult to advance the growth of rural areas and
existing conurbation centres due to the insufficient road connections between major towns.
Secondly, the current condition of some roads are less than ideal. The reliance on gravel
roads inhibits the development of industry, as transportation of goods such as
local agricultural and manufactured products is constrained due to the duration of
transportation and lack of accessibility to onward transport, for example, to ports or airports.
As a matter of fact, Kota Kinabalu and Sipitang along the Pan Borneo Highway are not
connected by a dual carriageway but only a single road. The road infrastructure to SAIP
does not facilitate containerised transport and this represents a constraint on the
development of this food processing cluster. These issues need to be addressed by the SDC
which requires that such roads be widened to ease traffic and facilitate transportation of
industrial goods. By 2025, more than 80% of all gravel roads will be sealed21. By upgrading
existing graveled roads to sealed roads and improving access to major tourism, agriculture
and manufacturing areas, poverty reduction will also be accelerated.
Thirdly, congestion (intra- and inter-urban traffic) due to rapid urban growth and growing
population in the major towns of Kota Kinabalu, Sandakan, Tawau and Lahad Datu also
hinders transportation of industrial goods, raw materials and people as it increases the
duration of transportation.
21
JKR Sabah
sabah development corridor _115
Figure 5.1: Map Of Sabah Showing Existing Road Types and Planned Roads Under 9MP
Source: JKR
sabah development corridor _116
5.1.1.2
Planned or Proposed Projects
A total sum of RM3,187.5 million was approved under the 9MP for the provision of Road
Network Linkage22.
5.1.1.2.1
Main Road Projects Under the SDC:
• Connect Central Sabah to the South - Tongod southwards to Sapulut
• Create a second Eastern link and bypass Tawau municipality - Kunak to Merotai
• Connect North Sabah to the Central and Western Sub-Regions - Kota Marudu
towards Ranau
• Increase accessibility to tourism areas in the Eastern Sub-Region - Lahad Datu to Maliau
Basin, Danum Valley and the Tabin Wildlife Sanctuary
• Construct a tourism coastal road - Tuaran to Kota Belud
• Enable transportation of industrial goods – Kota Kinabalu Industrial Park (KKIP) to Ranau
• Enable better transportation of industrial goods between Kota Kinabalu and the
Sipitang Industrial Area with a dual trunk road from Kota Kinabalu to Papar and
onwards to Beaufort
• Improve road infrastructure between the SAIP and Kota Kinabalu sea port urgently
to cater for containerised transport
• Upgrade, widen and strengthen the road from the KKIP to the nearest port (Sapangar
Bay) to enable transportation of containerised cargo
Key considerations for road projects:
• Ensure that roads for the major industrial and agricultural areas are constructed so
that congestion in major towns can be bypassed
• Ensure that roads are sealed between the proposed SDC agricultural collection centres
and the nearest main road to ensure that agricultural goods can be transported easily
and efficiently
• Increase facilities for road users on main highways by providing rest areas
• Enhance intra-city road transportation by consolidating the various providers of public
22
bus transportation
JKR Sabah
sabah development corridor _117
From figure 5.1, the continuation projects under the 9MP include:
• Jalan Sapulut – Kalabakan (linking southeast to west). There is a need to construct
the road to sealed standard as this will complete the Basic Sabah Trunk Roads Network
which facilitates the transportation of goods and products between Kota Kinabalu
and Tawau.
The main proposed new road building projects include:
5.1.1.2.2
• Jalan Kota Marudu – Marak Parak – Poring Ranau
• Jalan Dari Telipok – Pekan Kiulu – Lokos – Toboh – Randagong, Ranau
• Jalan Sapulut – Pagalungan
Rehabilitation Projects
The rehabilitation of existing trunk roads which are beyond maintenance should be carried
out urgently. Upgrading of graveled to sealed road will raise the standard of living of the
rural poor. These roads will be constructed to JKR standards based on the projected area of
development and population served. The target is to have all graveled roads under the State
Government Register sealed by post 2025.
5.1.1.2.3
Manufacturing-Related Road Projects
The projects include:
5.1.1.2.4
• Lahad Datu Northern Ring Road (Link to POIC Lahad Datu)
• Jalan Ulu Sibuga and Jalan Bokara (Link to POIC Sandakan)
• Main roads inside the KKIP
Tourism-Related Road Projects
The road projects under this category include Jalan Sukau (under construction) and Jalan
Tabin in Lahad Datu. An access road to the Maliau Basin Studies Centre in Tawau has also
been planned.
sabah development corridor _118
5.1.1.2.5
Rural and Agricultural Road Projects
Under the rural roads programme of the 9MP, more roads of minimum JKR standards
will be constructed to improve transportation of agriculture produce. In addition, the
programme will be expanded to connect resettlement areas to rural industrial areas and
estates, particularly in Sabah, to enhance the mobility of the rural population to work in
these areas. This will contribute towards reducing the development gap between urban
and rural areas. Jalan Jeroco, Lahad Datu and the newly proposed Jalan Linuyukan –
Pinangah and Jalan Lintas Libaran come under this category.
5.1.2
Air Network
Sabah currently has strong connectivity by air both internally and externally. Kota Kinabalu
International Airport (KKIA) is the second busiest airport (based on number of passenger
movements) in Malaysia after the Kuala Lumpur International Airport. The KKIA is the main
gateway to Sabah and is located about 7km from the town centre.
Owing to its central location, the KKIA is less than three hours by flight from most of the
ASEAN capitals and North Asia. This makes KKIA ideal for low cost carriers and as a second
hub as already identified by Air Asia.
There are direct flights to Hong Kong, Macau, Shenzhen, Osaka, Seoul, Taipei, Kaohsiung,
Singapore, Manila, Kuala Lumpur, Cebu, Davao, Brunei and Labuan, which provide excellent
links to Kota Kinabalu, especially the Asia-Pacific rim.
The KKIA is designed to accommodate aircrafts up to Boeing 747. The main domestic
airports are located in Sandakan, Lahad Datu and Tawau. All these airports are capable of
accommodating Boeing 737 aircraft except for Lahad Datu (Fokker 50) which will be upgraded
in the near future.
sabah development corridor _119
Figure 5.2 Map of Domestic Flight Connections
Source: MAS, Air Asia, IDS
sabah development corridor _120
Figure 5.3 Map of International Flight Connections
Seoul
Osaka
Tokyo
Shanghai
To Europe
Xiamen
Guangzhou
Hong Kong
Taipei
Kaohsiung
Manila
Bangkok
Kota Kinabalu
Kuala Lumpur
Singapore
Brunei
Kuching
Manado
Balikpapan
Jakarta
Darwin
Source: MAS, IDS
sabah development corridor _121
Figure 5.4 Latest Figures in Passenger Traffic at Airports Across Sabah
Arrival
Thousand passengers
Departure
Kudat
2.9
2.9
0
0
Sandakan
Kota Kinabalu
Domestic International
311.6
316.8
0.5
0.2
Domestic International
Lahad Datu
1,615.6
1,496.4
747.3
358.9
Domestic International
Including transit passengers
Source: Malaysia Airports Sdn Bhd, 2006
sabah development corridor _122
333.8
325.3
0.5
0.7
Domestic International
Tawau
54.2
54.5
Domestic
0
0
International
5.1.2.1
Challenges
The major issue with airports is cargo handling capacity. As of 2006, cargo volume discharged
was at 19.2 million kg and cargo loaded was at 18.5 million kg. This represents an increase
of 10.5% and 11.1% over the 2005 figures, respectively.
There is increasing demand from local manufacturers to utilise air freight. However, the
existing KKIA is not able to handle a full cargo airplane. This suggests that current cargo
handling capacity at Sabah’s airports (especially KKIA) needs to be expanded in order to
meet industry demands in the near future.
5.1.2.2
Planned or Proposed Projects
• KKIA has two existing terminals. Terminal 1 is currently used for regular fare airlines
and Terminal 2 for low cost carriers. KKIA is currently being expanded to cater for
10 million passengers annually and Terminal 2 will be upgraded to a full-fledged
cargo terminal
• Expansion of the terminal at Sandakan airport, which is currently considered a
• A new airport at Lahad Datu able to accommodate the Airbus 320 to support
5.1.3
second eastern gateway to Sabah
activities of POIC, aquaculture and the growing tourism development
Sea Network
Sabah is well-served via a sea network comprising eight ports including the newly
developed SBCP. The following map shows the various ports and their locations along
the Sabah coastline.
sabah development corridor _123
Figure 5.5 Map of Sabah Port Locations
Source: IDS
Sabah’s ports play a pivotal role in the total logistics chain, enabling trade and economic
development. As can be seen from Table 5.1, the ports of Kota Kinabalu, Sandakan, Tawau
and Lahad Datu are used mainly for containers and dry cargo. Sapangar Bay Oil Terminal
(SBOT), Sandakan, Lahad Datu, Kunak and Tawau are also heavily utilised for transportation
of liquid cargo (mainly palm oil). SBCP is dedicated solely as a container port and has been
in operation since June 2007. SBCP expects to draw larger and more vessels from within
Sabah, Sarawak and neighbouring countries (Brunei, Indonesia, Southern Philippines) as
well as North Asia to call at the port. Services from the existing Kota Kinabalu Port are
expected to be moved to SBCP within three years. Kota Kinabalu Port is currently handling
sabah development corridor _124
transhipment of containers from Indochina and the Indian sub-continent, along with other
regional and local destinations.
Table 5.1 Sabah Ports and Facilities / Capacity
Ports
Primary /
Feeder Port
Conventional
Cargo Maximum
Capacity, 2006
Main Cargo Handled
Sapangar Bay Container
Port*
Kota Kinabalu Port
Sandakan Port
Primary
500,000 TEU
Container
Primary
Primary
16,000 DWT
75,000 DWT
Sapangar Bay Oil Terminal
Feeder
40,000 DWT
Tawau Port
Feeder
30,000 DWT
Lahad Datu Port
Feeder
45,000 DWT
Kunak Port
Kudat Port
Feeder
Feeder
28,000 DWT
4,000 DWT
General cargo / Dry bulk
Container / General cargo / Dry bulk /
Palm oil
Specialised berth handling liquid bulk,
refined petroleum products and
chemical cargo
Container / General cargo / Bulk cargo /
Liquid petroleum / Palm oil
Container / General cargo / Dry bulk /
Palm oil
Palm oil products
General cargo
*Operational since June 2007
Source: The Prospect and Challenges in Logistics Industry in Sabah, 10 May 2007
Overall volume of container throughput in Sabah ports is projected to increase by 10%
per annum from 230,000 TEUs in 2006 to 880,000 TEUs in 2020. Transhipment volume is
projected to increase by 20% per annum from 10,000 TEUs in 2006 to 130,000 TEUs in 2020.
Figure 5.6 Total Cargo Throughput
TEU
250,000
194,976
200,000
208,098
208,490
226,710
171,154
149,500
152,725
150,000
100,000
50,000
0
2000
2001
2002
2003
2004
2005
2006
Source: Sabah Ports
sabah development corridor _125
5.1.3.1
Challenges
The key challenge for ports in Sabah is in relation to other regional ports and the ability to
attract major shipping liners to make scheduled calls. However, port operator Sabah Ports is
currently in active discussions with shipping liners and other ports to build strategic alliances
which will enable better sea connectivity to and from Sabah.
5.1.3.2
Planned or Proposed Projects
Sabah Ports currently has the following projects in the pipeline:
• Sandakan POIC in Mowtas
• Lahad Datu Port for POIC
• Lahad Datu fertiliser conveyor system and storage
• Sapangar Bay Oil Terminal extension
• Oil storage and depot at Sapangar, Lahad Datu and Sandakan
• New Sapangar Bay Container Port (relocation of KK port)
• New incentive structure linking cargo volume to reduced port charges for feeder
vessel operators
Plans are underway to strengthen Sabah’s logistics further.
sabah development corridor _126
5.2
5.2.1
Utilities
Power
Sabah’s current electricity coverage is 67% of the population. By 2010, rural electricity
coverage is expected to increase to 80.6% and overall coverage to 90%23.
Current electricity demand is 600MW and generation capacity is 680-785MW, of which
59% of the total units generated are purchased from independent power producers. Sabah
Electricity Sdn Bhd (SESB) generates, transmits and distributes electricity in Sabah to 374,023
customers spread over a wide area.
The installed capacity of the West Coast Grid which supplies electricity to Kota Kinabalu,
Federal Territory Labuan, Keningau, Beaufort, Papar, Kota Belud, Kota Marudu and Kudat is
488.4MW and the maximum demand is 396.5MW.
The East Coast Grid 132kV Transmission Line connecting the major towns in the East Coast
has an installed capacity of 333.02MW and the maximum demand is 203.3MW.
The forecast demand growth of electricity is in the region of 7.7% per annum up to the
year 2010. In order to support the growing demand, various generation, transmission and
distribution projects will be implemented such as the 300MW plant in Lahad Datu, with exact
location to be determined by a detailed environment impact assessment study.
A fully integrated grid connecting the West Coast Grid to the East Coast Grid was completed
in July 2007, and about 90% of customers are now connected to this integrated grid.
23
Ninth Malaysia Plan
sabah development corridor _127
Figure 5.7 Electricity Transmission Lines, Major, Rural, Mini Hydro and IPP Stations
M
M1
M2
M4
M5
M6
Major Stations (6)
SJ Patau- Patau
SJ Hilton Tenom Pangi
SJ Melawa
SJ Sandakan
SJ Tawau
Mn
Mn1
Mn2
Mn3
Mn4
Mn5
Minor Stations (5)
Nabawan
Telupid
Ranau
Kundasang
Tungku
Source: Sabah Electricity Sdn Bhd
sabah development corridor _128
R
R1
R2
R3
R4
R5
R6
Rural Stations (23)
Pensiangan
Saputut
Pinangah
Tongod
Kg. Karamuak Dalam
Kg. Tenaga Baru
R8
R9
R10
R11
R12
R13
R14a
R14b
Kg. Paginatan
Kg. Minihas
P. Gaya
Kg. Timbua
P. Mantanani
Karakit, P. Banggi
Kg. Tangkarason A
Kg. Tangkarason B
R15
R16
R17
R18
R19
R20
R21
R22
Kg. Terusan
Kg. Keniogan
Kg. Tetabuan
Kg. Nunuyan laut
Kg. Tanjung Aru
Lihak-Lihak Bakung
Lihak-Lihak Siaban
Sg. Tamang P. Sebatik
MH
MH1
MH2
MH3
MH4
MH5
MH6
MH7
Mini Hydro (7)
Sayap
Melangkap
Kiau
Naradau
Carabau
Bombalai
Merotai
IPP
IPP1
IPP2
IPP3
IPP4
IPP5
IPP6
Independent Power Plant (6)
ARL Melawa
Powertron Sepanggar
Sandakan Power Corp (SPC)
Strataves 1 Sandakan
Serudong Power Tawau
Sepanggar Bay Power Corp
5.2.1.1
Challenges
Sabah’s electricity network is not as reliable as that in other parts of Malaysia. System
Average Interruption Duration Index (SAIDI) for Sabah was 2,540 minutes in 2005 compared
to Peninsula Malaysia’s SAIDI of 101.6 minutes. This is due to the fact that the current
distribution network is not strong and requires reinforcement. However, this is being
mitigated by the construction of the new East-West transmission grid which will stabilise
power supply to the East Coast.
Currently, approximately 50% of Sabah’s electricity generation capacity is via diesel (see
Figure 5.8). Electricity generation via diesel power plants is costly (RM0.26 per kWh versus
RM0.09 for gas and RM0.03 for hydro generation) and presents an environmental challenge.
Furthermore, the persistent rise in fuel costs and fuel scarcity implicates an incessant rise in
generation costs.
Figure 5.8 Sabah Grid Generation Capacity Mix FY2006/07
Hydro
(66 MW)
Biomass
(14 MW)
1.8%
8.3%
49.6%
Gas
(320 MW)
Diesel/MFO
(395 MW)
40.3%
Source: Sabah Electricity Sdn Bhd
Generation and supply of electricity to rural areas is a challenge due to geographical factors
and lack of infrastructure, which cause implementation to be very expensive and difficult.
Moreover, land access is another hindrance to implementation of unitary power stations.
sabah development corridor _129
5.2.1.2
Planned or Proposed Projects
New capacity of approximately 2,700 MW will be required between now and 2025 to fulfil
projected electricity demand.
Figure 5.9 Projected Electricity Demand and Generation Capacity for Sabah
Total Dependable Capacity
Load Forecast
MW
4,000
3,531
3,500
3,000
2,348
2,500
2,652
2,000
1,605
1,800
1,500
882
1,000
710
500
1,029
1,220
830
0
Reserve
Margin
2008
2010
2015
2020
2025
24%
24%
32%
30%
33%
Source: Sabah Electricity Sdn Bhd
i) Increase Capacity
Under 9MP, a new gas-based plant with a capacity of 190 MW will be commissioned in
2008. To meet demand as well as improve the reliability of supply in the East Coast,
a 300 MW plant will be constructed for operation in 2009/2010. There will also be six
major generation development plans up to 2010. In addition, POIC co-generation in the
Eastern Sub-Region will be promoted.
sabah development corridor _130
ii) Strengthen Grid
There will be 23 transmission development plans up to 2010. Additionally, other projects
will include the KK Outer Ring (KKOR) to increase the city’s supply security. The first phase
is scheduled to be completed by February 2008, while the second phase will be completed
in January 2009. New transmission network linking the southern part of the east and west
coast grid will be built and worn cables and poles in the grid system will be strengthened
and rehabilitated.
iii) Promote Rural Electrification
5.2.2
The implementation of the rural electrification programme will be intensified under the
9MP using solar hybrid and micro-hydro systems. By the end of the Plan’s period, rural
electricity coverage is expected to increase to 80.6% in Sabah. In comparison, rural
electricity coverage for Malaysia is at 98.6%24.
Water
All main towns are supplied with treated water. There are currently 39 water treatment
plants with a total production capacity of 762 million litres per day (MLD) supplying to
200,000 consumers. Current demand is 937 MLD. At the moment, demand outstrips
effective supply by 23%. In 2005, 90% of Sabah’s urban population was served with
piped water, while 61% was served in the rural areas. Overall, 75.5% of the population
was served with piped water whereas Malaysia’s overall population served with piped
water was 95% in 2005. By the end of the 9MP, it is targeted that urban coverage will reach
92% and rural coverage will be 70% in Sabah.
Water demand for domestic and industrial use is expected to increase in line with
population growth per annum. New water supply of approximately 1,318 MLD will be
required between now and 2025.
24
Economic Planning Unit 2005
sabah development corridor _131
Figure 5.10 Projected Water Capacity, Supply and Demand
Million Litres
Per Day
4,721
Production
Capacity
2,991
Supply
1,895
1,201
1,362
1,848
2,507
2,255
1,767
Demand
2020
2025
Additional
Demand
2007 - 2025
+ 1318 MLD
1,384
1,085
845
2005
2010
2015
Source: Water Supply Department, Ministry of Energy, Water and Communications
Water production in Kota Kinabalu, Sandakan, Tawau and Lahad Datu is undertaken by private
companies, and by the Water Department for other areas. Water distribution throughout the
state is, however, solely undertaken by the Water Department.
5.2.2.1
Challenges
Water supply to rural areas remains a key issue. Building water pipes and treatment plants
in remote rural areas is prohibitively expensive due to the lack of infrastructure and water
sources in some areas.
Non-Revenue Water (NRW), arising from leakages from water pipes and pilferages in Sabah,
stands at 57%. In comparison, the national NRW average is 37%. Urban areas fare better than
suburban and rural areas in terms of having a lower NRW. In some suburbs, NRW can increase
to more than 60%.
Pollution of natural water sources such as rivers due to waste dumping and sewage needs
to be urgently addressed. This concern has caused water treatment costs to increase and
affects water production capacity.
sabah development corridor _132
5.2.2.2
Planned or Proposed Projects
Under the 9MP, RM1.313 billion has been allocated to the State Water Department to
undertake projects throughout the state. The additional capacity from such water
projects will be 380 MLD by 2010. Major projects include the construction of Milau
Dam and four other water treatment plants in Tuaran, Papar, Kudat and Sandakan.
The SDC will:
• Implement more groundwater abstraction and rainwater harvesting systems in rural
• Focus on reducing NRW by ensuring strict enforcement against water pilferage, pipe
and meter replacements, Geographical Information System (GIS) mapping of
distribution networks, rehabilitation of distribution systems and upgrading of existing
treatment plants
• Encourage industry and manufacturers, especially within the POIC, to recycle water by
offering tariff incentives
• Continue to enforce planning and protection of water catchments and natural water
5.2.3
areas to increase supply
sources by increasing awareness on the importance of water conservation
Telecoms
Telekom Malaysia (TM) is the main telecommunication company operating in Sabah. It
provides fixed line and cellular phone facilities. Five other telecommunication companies
also operate in the state but they currently provide cellular phone facilities only. Sabah has
the lowest Direct Exchange Line (DEL) penetration rate, cellular penetration and internet dialup penetration rate per 100 inhabitants.
sabah development corridor _133
Figure 5.11 DEL Penetration Rate Per 100 Inhabitants by State, 2007
Pulau Pinang
23.1
W. P. Kuala Lumpur
23.0
21.4
Selangor
19.9
Melaka
Negeri Sembilan
17.7
Perak
17.6
Johor
17.5
16.3
W. P. Labuan
12.8
Kedah and Perlis
Pahang
11.9
Terengganu
11.9
10.8
Sarawak
8.2
Kelantan
Sabah
6.5
Source: Yearbook of Statistics, Sabah, 2006
DEL connects a customer’s equipment to the Public Switched Telephone Network (PSTN)
and has a dedicated port on a telephone exchange. The penetration rate is the number of
DELs per 100 inhabitants.
sabah development corridor _134
Figure 5.12 Cellular Phones Penetration Rate Per 100 Inhabitants by State, 2006
W. P. Kuala Lumpur
93.1
Melaka
87.6
Selangor
76.3
Negeri Sembilan
75.6
Pulau Pinang
72.6
Perlis
70.6
Johor
70.0
Terengganu
62.4
Kedah
60.2
Perak
57.1
Pahang
56.6
Kelantan
51.5
Sarawak
51.5
Sabah
36.9
Source: Yearbook of Statistics, Sabah, 2006
Figure 5.13 Broadband Penetration Rate Per 100 Inhabitants by State, 2007
W. P. Kuala Lumpur
34.5
Pulau Pinang
21.3
Selangor
19.8
W. P. Labuan
10.8
Melaka
10.7
Johor
9.3
Negeri Sembilan
7.6
Perak
7.3
Sarawak
7.2
Kedah
5.4
Sabah
4.9
Pahang
4.6
Terengganu
4.6
Perlis
Kelantan
3.8
3.2
Source: Yearbook of Statistics, Sabah, 2006
sabah development corridor _135
Figure 5.14 Internet Dial-Up Penetration Rate Per 100 Inhabitants by State, 2007
36.6
W. P. Kuala Lumpur
17.5
Pulau Pinang
16.8
W. P. Labuan
15.6
Selangor
12.8
Melaka
11.6
Negeri Sembilan
10.8
Johor
10.4
Perlis
9.2
Perak
Kedah
7.0
Sarawak
6.9
Terengganu
6.8
Pahang
6.7
Kelantan
6.4
Sabah
4.3
Source: Yearbook of Statistics, Sabah, 2006
5.2.3.1
Challenges
Sabah’s scale makes implementation costly and difficult. Construction of a network requires
significant capital expenditure and current low demand in rural areas does not justify such
high expenditure.
Generally, low income levels mean that people would rather spend on mobile phones and
use Internet at their offices instead of setting up Internet access at home.
At the moment, TM is unable to build low cost networks and provide low cost pricing to
consumers due to the high cost of equipment which are sourced from abroad.
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5.2.3.2
Planned or Proposed Projects
• To increase coverage in rural areas, mobile phone networks offer GPRS services.
• To begin at the end of 2007, a high speed broadband project
• To spend RM60 million on improving telecommunication networks in new
5.2.4.1
development areas
• To set up more Wi-Fi hotspots to encourage higher data connectivity and broadband
5.2.4
Currently Celcom is the largest provider in rural areas
penetration
• To introduce WiMAX in the medium to long term
Solid Waste and Sewerage
Solid Waste
At present there are 23 solid waste disposal sites in Sabah under the jurisdiction of each
district. Responsibility for waste collection, removal and disposal lies with the individual
District Council. Residents in non-rated areas and informal settlements are not covered by
formal waste collection services and resort to waste burning, dumping of waste on nearby
open land and disposal of waste in the rivers and sea.
5.2.4.1.1
Challenges
Poorly designed waste disposal sites with a lack of operation and maintenance procedures
result in poorer quality of life due to adverse environmental impact. Pollution of natural
waterways, groundwater, marine environment and the air are just some of the side effects.
In addition, disposal sites that are not properly rehabilitated have become an eyesore and a
health issue for both locals and tourists. Major challenges include the lack of awareness of
better management of solid waste (3Rs – Reuse, Recycle, Reduce) and lack of expertise in the
efficient treatment of solid waste.
sabah development corridor _137
5.2.4.1.2
Planned or Proposed Projects
Current programmes in place include the first Material Recovery Facility (MRF) of
landfills system in Malaysia. Previously when DBKK collected domestic waste, 100%
of the waste would be disposed into the landfill. With this new system, companies first
recover some of the recyclable waste. Organic waste is recovered and converted into
compost. They have found that almost 70-75% of the waste is recoverable. The benefits
include a decrease in leachate, an increase in the lifespan of landfills and most importantly
the system is environmentally friendly. The MRF system costs RM14 million.
Projects to include:
• Improving the planning, management and regulation of operation and maintenance
• Introducing large scale vermiculture where earthworms are used to consume and
convert organic waste into odourless, natural fertilisers
• Generating awareness on waste disposal and recycling through education. Currently,
composting has been encouraged at three levels: commercial, communal and
individual households
5.2.4.2
of waste disposal systems
• Managing waste in the water villages via Dewan Bandaraya Kota Kinabalu’s (DBKK)
efforts to promote recycling by encouraging people to collect garbage which DBKK
then buys from them
Sewerage
Currently Sabah uses a mixture of common and individual wastewater treatment systems
and sludge treatment systems. Common wastewater collection and treatment systems are
used in town centres and main residential areas. Individual septic tanks are being used mainly
in the older and rural residential areas.
5.2.4.2.1
Challenges
Challenges with respect to wastewater stem mainly from lack of maintenance of the
sewerage system due to lack of funding and expertise as well as aging of the pipes.
Moreover, overall treatment efficiency is very low and consequently some systems are
unable to cope with the increasing amount of sewage.
sabah development corridor _138
5.2.4.2.2
Planned or Proposed Projects
Privatisation plans of some functions, for example, maintenance, are being looked into as
a means of overcoming the challenges of upgrading and proper maintenance. With respect
to sewage in the water villages, new systems such as vacuum sewer systems can aid in
reducing the amount of sewage going into the sea. This works by sucking the sewage and
transporting it via pipe to a treatment site based on land.
5.2.5
Irrigation
Irrigation and drainage development will be a vital contributing factor towards promoting
the development of agriculture in Sabah. Irrigated agriculture has traditionally been
associated with paddy cultivation, but since the 1970s the Department of Irrigation
and Drainage (DID) has also developed upland irrigation and provided irrigation
infrastructure for high-value crops. The DID plans to co-ordinate closely with other
relevant government departments and agencies in planning irrigation infrastructures
for proposed agricultural land development.
The acreage for irrigated paddy areas in Sabah has increased from 1,600 hectares in 1967 to
18,167 hectares in 2006, and the average paddy yield has increased from about 1 tonne per
hectare to about 4 tonne per hectare over the same period.
The DID has developed over 80 irrigation schemes. The major ones are located in the districts
of Kota Belud, Keningau, Kota Marudu, Papar and Tuaran.
5.2.5.1
Challenges
The main challenges arise from poor management of water sources, water pilferage from
irrigated land and lack of suitable farming applications and practices (due to a lack of
ploughing machinery).
5.2.5.2
Planned or Proposed Projects
• Increase irrigation and drainage infrastructure through execution of new projects,
• Upgrade and extend irrigation infrastructure to identified potential areas in the vicinity
both for paddy and non-paddy crops
of existing schemes
• Improve utilisation of irrigation and drainage facilities already provided in the existing
paddy areas
sabah development corridor _139
• Improve irrigation water management practices
• Provide technical assistance in infrastructure development and crop diversification
from paddy to other profitable crops in identified non-granary areas
For the sustainability of the availability of water for irrigation, development works for
irrigation and drainage schemes will be undertaken on an environmentally friendly basis.
Sustainability and environment protection underscore all projects.
5.3
Human Capital Development
Based on the latest population census, Sabah had a population of 2,603,485 in 2000. Between
the period 2000 to 2005, the population of Sabah recorded an average annual growth rate of
2.29%. Sabah’s population is relatively young with the majority (80%) of the population aged
below 39 years old. As of 2007, Sabah’s population is estimated at 3.1 million (Department
of Statistics).
In 2006, Sabah’s labour force stood at 1,264,100 with 1,190,782 people employed while the
number of unemployed was 73,31825. The labour force participation rate was at 64.8%. The
unemployment rate for Sabah stood at 5.8% in 2006 which was higher than the national level
of 3.1%.
25
Department of Statistics
sabah development corridor _140
Figure 5.15 Trend in Unemployment Rate
Sabah unemployment rate
Malaysia unemployment rate
6.5%
7.0%
5.9%
6.0%
6.5%
5.8%
5.8%
5.4%
5.0%
4.0%
3.6%
3.0%
3.6%
3.5%
3.5%
3.8%
3.1%
2.0%
1.0%
0.0%
2001
2002
2003
2004
2005
2006
Source: Yearbook of Statistics, Sabah, 2006
Agriculture, hunting and forestry is by far the largest sector by percentage of employed
persons by industry (30%). This is followed by the wholesale, retail trade and repair of motor
vehicles, and household goods industry (15.5%).
Figure 5.16 Distribution of Employed Persons by Industry, Sabah, 1980-2006
Percentage
100%
41.9
Agriculture, hunting, forestry
and fishery
34.0
56.1
Manufacturing
0.6
Construction
Transport, storage and
communications
Finance, insurance, real
estate, renting and
business activities
Public admin, defence,
community, education, health,
social and personal services
Others
0.3
0.3
Mining and quarrying
Wholesale and retail trade,
hotels and restaurants
30.5
9.1
4.8
3.2
0.3
6.2
19.0
4.2
1980
2.2
21.2
5.1
4.7
3.5
4.6
3.2
21.3
2.0
1991
21.5
17.5
12.6
0.9
7.7
5.9
7.8
2.8
11.4
11.4
19.6
1.8
2000
8.0
2006
Source: Yearbook of Statistics, Sabah, 2006
sabah development corridor _141
Figure 5.17 Distribution of Employed Persons by Occupation in Sabah, 2006
Others
15.8%
Public administration,
defence, community,
education, health, social
and personal services
30.5%
Agriculture, hunting,
forestry and fishery
19.6%
0.3% Mining and quarrying
Finance, insurance, real estate,
renting and business activities
11.4%
3.5%
Manufacturing
4.7%
Transport, storage
and communications
7.7%
21.5%
Construction
Wholesale and retail trade,
hotels and restaurants
Source: Yearbook of Statistics, Sabah, 2006
There are numerous ministries, departments, agencies and statutory bodies that contribute
towards human capital development in Sabah. The services offered range from direct
scholarship and funding to training and provision of resources.
5.3.1
Challenges
Within the SDC implementation period, human capital requirements would need to be met
by local supply to ensure sustainability. Interviews with prospective investors suggest that
most employers require graduates in science, technical or vocational fields (for example,
leisure management, technicians and plantation management). However, evidence from
interviews suggest that currently there is a surplus of graduates in arts and humanities and
a shortage of science and technology graduates.
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5.3.2
Strategies
There is a need for greater precision in generating human capital that meets industry
requirements in tourism, agriculture and manufacturing. This will be addressed by the
following strategies:
• Increase the number of skilled workers to enable full support of the development of the
tourism, agriculture and manufacturing sectors
• Improve skills and competency levels to facilitate transition from a production-based to a
knowledge-based economy
• Develop a regularly updated database of existing talents vis-a-vis skills required by
industries operating in Sabah:
º
º
º
Current stock of talents
Skilled manpower requirements study (based on industrialists’ projections)
Students who have been awarded scholarships
Existing
Industries
New Industries
• Tourism
• Agriculture
• Palm oil
downstream
• Biotech
5.3.3
Challenges
Proposed Solutions
• Skills shortage, e.g.
communications, technical,
soft skills
• Potential employees have a lack
of exposure
• Lack of available jobs
• Lack of suitable graduates
• Set up Human Capital Planning Council
(HCPC) under 1-stop implementation
agency
º Co-ordinate between industry and
academia
º Industry internships
º Enhance career service centre
• Some industries not present yet
• Potential investors would need to
be convinced that manpower
sourcing is not a problem
• Within SEDIA & HCPC investment
officers will guarantee services in terms
of sourcing skills, manpower for industry
• HCPC will collect manpower statistics and
build database of Sabahan returnees
Programmes
• Set up a Human Capital Planning Council (HCPC) to take charge of collecting relevant
manpower statistics, co-ordinating academia and industry, co-ordinating recruitment
fairs and building a database of skilled Sabahan returnees
• Drastically ramp up internship programmes whereby students can work in the
industry during the course of study with the potential to gain permanent employment
after graduation. It should be made compulsory for all Yayasan Sabah scholars to do
internships
sabah development corridor _143
• Expand the capacity of science and technology education, training and enrolment to • Increase ratio of students in Sabah’s higher education institutions to 70:30 (science
to humanities)
• Increase and improve the profile and importance of careers in agriculture,
manufacturing and tourism. This can be achieved by bringing well-respected
figureheads in their respective industries to give motivational talks and insights
into their jobs to students at universities and training colleges
• Increase Sabah’s profile as a choice destination for aspiring scientists and
researchers in manufacturing and agriculture and ensure the transfer of skills and
knowledge to local manpower
• Create incentives (start-up grants, etc) to encourage talented Sabahans to invest in
Sabah’s future. Funds can be channelled towards collaborative research work.
Scientists and ex-MNC executives should be able to apply for soft loans for research
purposes and then be incentivised to hit key targets by having the ability to convert
their soft loans into grants. Such programmes will require peer review panels to
ascertain the viability of such projects
5.3.3.1
provide for the future development of the agricultural and manufacturing sectors.
• Upgrade existing skills and training centres such as MARA Skills Institute (IKM),
Sabah Skills Technology Centre, Industrial Training Institute (ILP) and KK Politeknik to
generate the right human capital for Sabah’s requirements
Sandakan Education Hub
In line with the second thrust of the National Mission to enhance human capital, the
state will strengthen capacity building in order to develop knowledgeable, skilled and
innovative human capital in the move towards a knowledge-based economy. One of the
flagship projects to achieve this goal is the development of an Education Hub in Sandakan.
The Sandakan Education Hub (SEH) covers a total area of 1,356 acres where institutions of
higher learning, research centres, private colleges and polytechnics will be located. It is a key
component of the Agrobio Innovation Zone.
The SEH will also provide the necessary infrastructure for agriculture, forestry and
ecological research such as science laboratories. R&D centres and skills training centres
for biodiversity, wildlife and environmental conservation, biotech industry and the palm
oil and downstream manufacturing industries will also be planned for the hub.
To date, five colleges have expressed an interest in establishing campuses in Sandakan.
The five colleges are:
• MRSM / MARA
• Universiti Malaysia Sabah – Sekolah Pertanian
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• Politeknik Sandakan
• Kolej Tunku Abdul Rahman
• Pusat Latihan Lembaga Hasil Dalam Negeri
Education will receive renewed focus under the SDC.
5.3.3.2
Interior Education Hub
The Central Sub-Region has been earmarked as the Sabah’s agricultural hinterland and
food production belt. It is also home to the world-renowned icon, Mount Kinabalu,
and rich cultural heritage. Unfortunately however, poverty is widespread in the Central
Sub-Region. In order to enable these natural endowments to be capitalised to generate
income for the people, there is a need to establish an Interior Education Hub within the
Central Sub-Region to build the necessary human capital.
The Interior Education Hub may be initiated by Yayasan Sabah to build human capital
for the tourism and agriculture sectors, especially in handicrafts, SNP, food and livestock
industry, as well as to train rural agropreneurs and develop agribusinesses. Yayasan
Sabah may also consider establishing schools and colleges along the MRSM-Yayasan
Terengganu model for high achievers from rural schools especially those from the low
income families (see Chapter 6).
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