Chief Minister Defends Ulu Padas Dam Project Progress against Claims of Contractor Failure

The Chief Minister (right) at the DUN sitting

14 April 2025

KOTA KINABALU: The Chief Minister Datuk Seri Panglima Hajiji Noor refuted the claim that Kerjaya Kagum Hitech JV Sdn. Bhd. has failed to implement the Ulu Padas Dam Project.

He said this in reply to Lamag State Assemblyman Datuk Bung Moktar Radin, during the State Assembly sitting today.

Bung had asked about the justification for the Government to allow Kerjaya Kagum Hitech JV Sdn Bhd to continue participating in the Tenom Dam project despite having failed to implement it since 2015.

Hajiji said the Ulu Padas Dam Project has undergone a lengthy process, due to changes in shareholding, rigorous technical studies, delays caused by the Federal and State Governments, and the outbreak of the COVID-19 pandemic. 

He explained, "The project was awarded by the Ministry of Energy, Green Technology and Water on 13 July 2015, with equity holdings of 60% by Kerjaya Kagum Hitech JV Sdn. Bhd., 20% by Sabah Electricity Sdn. Bhd., and 20% by the Sabah State Government. After Sabah Electricity declined its share, Sabah Energy Corporation Sdn. Bhd. was appointed as the 40% State Government representative through Upper Padas Power Sdn. Bhd. on 9 June 2016, ensuring full Government involvement in the project.”

Before commencing, the project underwent a stringent assessment process. From December 2015 to March 2017, the developer conducted due diligence on the engineering data from Sabah Electricity, determining it needed updates for a solid technical foundation, according to him.

From June 2017 to June 2019, extensive studies, including a Special Environmental Impact Assessment (SEIA), took place. However, on 1 October 2018, the Federal Government postponed the project. On 25 July 2019, the State Government approved Upper Padas Power Sdn. Bhd. to proceed, followed by Federal Cabinet approval on 13 February 2020. 

He clarified, “The Ulu Padas Dam Project is expected to be fully completed by 2030 and, along with existing and planned generation projects, will help ensure that the generation capacity reserve margin remains above 25 per cent for Sabah's grid, connecting the electricity supply system across the districts in the state of Sabah and W.P. Labuan.

Once the Ulu Padas Dam is fully operational, water supply issues in Sabah can be addressed with the Ulu Padas Water Supply Scheme (SBAUP), which has the potential to supply 6,000 million litres daily and can meet water needs for up to 100 years.”

He stressed that the Ulu Padas Dam Project offers several benefits. It can supply up to 200 megawatts of floating solar energy on the lake created by the dam.

The 4,000-hectare catchment area will support forestry and freshwater fishery research as well as ecotourism.

The State Government of Sabah, via Sabah Energy Corporation, is expected to earn over RM3 billion in dividends and permit fees from long-term licensing agreements with the Sabah Forestry Department. Additionally, the dam will regulate water flow for the 72-megawatt Pangi Dam during droughts, boosting its energy generation.

He stated, the State Government of Sabah is dedicated to ensuring the successful implementation of the Ulu Padas Dam Project to meet the sustainable energy needs and enhance the well-being of its people.

Hajiji stressed that terminating the contract with Kerjaya Kagum Hitech JV Sdn. Bhd. is not applicable, as it is not the main contractor for the Ulu Padas Hydro Dam project, holding only a 15 per cent stake in Upper Padas Power Sdn. Bhd. The majority stakes are held by Gamuda Berhad at 45 per cent and Sabah Energy Corporation Sdn. Bhd., owned by the State Government of Sabah, at 40 per cent. Gamuda Berhad, as the main developer, is responsible for the project's execution, including design and construction. They have a proven track record in large-scale infrastructure projects and secured RM4.65 billion in funding from local financial institutions.