Phoong explains delay in RM31 billion Esteel project

Published on: Wednesday, June 04, 2025
Published on: Wed, Jun 04, 2025 Text Size: Phoong maintained that the company and its financial capacity were vetted by the Malaysian Investment Development Authority, as required for the approval of its manufacturing licence. Kota Kinabalu: State Industrial Development Minister Datuk Phoong Jin Zhe (pic) has sought to explain the delay in a RM31 billion steel investment project, saying this was caused by setbacks in securing the relevant approvals and natural gas supply. He said the initial projection to have Esteel Enterprise Sabah Sdn Bhd's factory begin operations in the fourth quarter of this year was based on the assumption that the approvals could be obtained without delay. However, he said, 'some obstructions' surfaced with Putrajaya's implementation of a two-year moratorium on approving manufacturing licences for steel-related industries. Phoong said this was acknowledged by Prime Minister Datuk Seri Anwar Ibrahim when he launched the project, which was first announced in November 2022, at the Sipitang Oil and Gas Industrial Park (Sogip). 'The special approval was only obtained on Jan 24, 2025, which affected the project's original timeframe,' he said in a statement. Phoong said technical assessments and negotiations with various stakeholders for the supply of natural gas to the factory had also pushed back the project's implementation. He was responding to Warisan's Elopura Assemblyman Calvin Chong, who had urged the State Government to come clean about the delay in the Esteel investment. Chong said the land lease agreement between Sogip and Esteel, signed in November 2022, stated that the first phase of the project would begin in the fourth quarter of 2023 and was expected to be completed within two years. The former DAP man also questioned the authenticity of the investment, claiming it was hard to find information on Esteel online, and also raised questions on the increased investment amount from RM20 billion to RM31 billion. Phoong maintained that the company and its financial capacity were vetted by the Malaysian Investment Development Authority, as required for the approval of its manufacturing licence. 'The latest amount of RM31 billion is a result of the company's latest review and calculation, which includes the construction of the plant, jetty and other related facilities. 'Value adjustments are common among phased development projects,' he said. The first phase of Esteel's investment in Sabah, estimated to be worth some RM6.4 billion, was officiated by Anwar at the Sabah International Convention Centre on May 30. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available.
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