KOTA KINABALU, March 15 — Sabah has signed a Memorandum of Understanding (MoU) with a China-based Fortune 500 company to potentially implement a RM17 billion flood mitigation, irrigation and drainage project in the state.
The Sabah Irrigation and Drainage Department (DID), on behalf of the Sabah Agriculture, Fisheries and Food Industry Ministry, signed the MoU with Shaanxi Construction Engineering Group Corporation Limited’s Malaysian subsidiary, Shaanxi Construction Engineering (Malaysia) Sdn Bhd (SCEM), earlier today to help address Sabah’s perennial flood, water and ultimately food security issues.
“Due diligence is expected to commence by the fourth quarter of the year. They will be studying some 11 rivers to see how they work, and we can proceed with a proper agreement after that,” said Sabah Deputy Chief Minister I Datuk Jeffrey Kitingan who is also state agriculture, fisheries and food industry minister.
Kitingan, who witnessed the MoU said this deal, if successful, was a huge opportunity for Sabah to solve many of its problems like unpredictable heavy floods, and now, the dry season.
Sabah could secure up to an estimated RM17 billion in foreign direct investment (FDI) if the studies proved favourable for the projects to be undertaken in future.
“This is an investment for them. It shows how attractive Sabah is for investment. The RM17 billion will have a multiplier effect up to three to five times on the economy plus potentially 20,000 jobs. This is very good for the state but most importantly, it will solve our problems with flood, water and food security,” he said.
SCEM will conduct due diligence in terms of flood mitigation, irrigation and drainage works in Sabah including the Moyog river in Penampang, Petagas and Putatan rivers in Putatan, Likas river in Kota Kinabalu, Tawau river in Tawau, Kadamaian river in Kota Belud, Bandau river in Kota Marudu, Membakut river in Beaufort, Padas river in Tenom, Pegalan river in Keningau and Dataran Bengkoka river in Pitas.
“As payment, we will give them sand, some from the rivers that may be blocking the rivermouth. It is up to them what they want to do with it. They are agreeable to accepting that as payment,” he said, adding that the details and mechanism are pending the outcome of the study.
Kitingan said that the company has the financial resources and technical capabilities to work with Sabah’s local companies to complete the flood mitigation, irrigation and drainage project.
“In 2024, the Sabah government is planning to expand paddy farming from 24,000 hectares to 30,000 hectares. This will reduce our reliance on rice imports and save hundreds of millions of ringgit, ensuring food security in Sabah.
“The estimated value of the projects is around RM 17 billion and expected to generate more than 20,000 jobs for the local Sabah community. Shaanxi Construction Engineering Group can help us to accomplish what we wanted but could not implement due to lack of funding,” he said.
Signing the MoU on behalf of the Sabah government was state DID director Siraja Bashora while SCEM was represented by its chief executive officer Cao Yue Lei. Also present was state Agriculture, Fisheries and Food Industries Ministry permanent secretary Datuk Robert Stidi.
