KUALA LUMPUR: Nov 4, 2026 – Prime Minister Datuk Seri Anwar Ibrahim has admitted that there were “sakau” (kickback) elements in the implementation of the Sabah Gas Pipeline (TSGP) project, with RM8.3 billion paid in 2018 although physical progress of the project was only 13 per cent.
He said the TSGP and the RM9.4 billion Multi-Product Pipeline (MPP) were approved in 2016 through direct negotiations without tender. The TSGP involves a 680-kilometre pipeline connecting Kimanis, Sandakan and Tawau.
He said the main cause of the losses was that the payment schedule was set based on dates rather than physical progress. This resulted in payments having to be made even though construction work had not begun.
“Investigations show there were ‘sakau’ elements. The investigation has not been closed because it involves two countries,” he said in reply to a question from Ranau Member of Parliament Datuk Jonathan Yasin in the Dewan Rakyat yesterday.
The project was cancelled in 2018, but the government remains bound by an RM8 billion loan obligation with China Exim Bank. China is also reported to have disagreed to continue the project in Sabah.
To meet Sabah’s energy needs, the Federal Government has taken alternative measures through new projects worth nearly RM5 billion, namely the Battery Energy Storage System (BESS) in Lahad Datu (RM644 million), the Southern Link (RM765 million) and the Ulu Padas Hydroelectric Project (RM4 billion).
Following the RM5 billion loan restructuring agreement signed on 30 October, the government succeeded in reducing the country’s risk of losses to RM3 billion now compared with RM8 billion.
