The Edge Markets, Photo Credit to The Edge Markets
clock 31-07-2019
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Part 2 Plan for RM20 Billion Bio-Industry Hub in Sabah Hangs in the Balance

Pelangi Prestasi’s plan for the SFI assets in Sipitang involves the development of central utilities and shared infrastructure within the 1,173ha site, as well as the upgrading of the jetty into a “bioport”.

The bioport will allow bioproducts to be exported to the regional and North Asian markets, says a source. At the same time, energy, water and materials produced there will be utilised in a symbiotic manner by the investors.

This symbiosis is the cornerstone of Denmark’s Kalundborg Symbiosis Centre — one of several European locations Pelangi Prestasi had visited to research their experience in developing a symbiotic industry, the source adds.

Other locations were Finland, where the company’s team met with Metsa Group’s management and visited its mill in Aanekoski, and the Netherlands’ Port of Rotterdam.

“The existing pulp mill will be modernised to become the catalyst of the project, to attract international bio-industry players to set up their biorefineries within the site. Biomaterials produced by the mill could be feedstock for the refineries, processing it into other speciality products,” the source says.

The end goal is to create an industrial area that utilises the products and residue of each investor, creating a symbiotic environment, as implemented in Kalundborg where energy, water and materials are used in such a manner.

Now, the plan depends on the judicial review by the Kota Kinabalu High Court, when the matter is heard on Aug 23. On June 28, the court granted leave to Pelangi Prestasi for judicial review of the state’s decision to impose new conditions on the company’s application for fresh timber licences.

Pelangi Prestasi was also successful in obtaining a stay order from the court to stop the R&M from engaging with other parties with a view to selling SFI’s assets.

It is believed that the R&M had called for an international tender for the sale of the assets after the state government informed it of its decision to not award fresh timber licences to Pelangi Prestasi.

For Pelangi Prestasi, the best outcome would be for the court to nullify the state’s decision and orders it to execute fresh timber licence agreements based on the same terms of the existing SFI licence.

Pelangi Prestasi says in its affidavit that it had fulfilled the original terms of the timber licence agreements, including paying RM20.24 million in salaries between March 15, 2018, and Jan 29, 2019, and settling 50% of all unpaid salaries between Jan 1, 2018, and March 14, 2018, amounting to RM2.87 million.

The company also says that it is  committed to providing employment to all SFI employees on the existing terms and without the loss of service tenure.

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