This article first appeared in The Edge Malaysia Weekly on July 29, 2024 - August 4, 2024

SARAWAK premier Tan Sri Abang Johari Tun Openg is a man in a hurry to get things done for his state, but he can be patient — when it is necessary.

Abang Johari is at Affin Bank Bhd’s headquarters in Kuala Lumpur when The Edge meets him for this interview on July 19. Backed by a sizeable entourage from Sarawak, which includes his three deputy premiers, Abang Johari had come to the capital city expecting to seal a deal to raise the state’s stake in the bank to around 30% from 4.8% currently.

However, it is understood that the signing ceremony for the deal had to be postponed.

Instead, the state inked a memorandum of understanding with the bank’s largest shareholder, the Armed Forces Fund Board (LTAT), to explore areas of potential cooperation between them.

If Abang Johari was disappointed or frustrated by the delay, it certainly did not show. It is no secret that the premier is keen to get the deal done as quickly as possible as the state has massive projects in the pipeline that require financing, among other reasons.

He explains that Bank Negara Malaysia has given conditional approval for the deal, and that there is now a “technical regulatory process” that the state has to complete before it can move on to sign a sale and purchase agreement with LTAT. He expects to be able to do so in a month.

Throughout the hour-long interview, Abang Johari — flanked by his deputies — speaks simply but passionately, and doesn’t pause for a beat as we fire questions at him, ranging from the state’s big ambitions and major ongoing/upcoming projects, to his views on the federal government.

He has fought hard for Sarawak to own a retail bank, to take over Bintulu Port from the federal government and is now working towards the state having its own airline. “One [thing] at a time,” he says with a laugh, when The Edge asks him what else he wants.

He may be 74 this year, but is still sharp and feisty, and it is clear that he has the state’s best interests at heart. Born in Limbang, Abang Johari — who has served as the head of the state since Jan 13, 2017 — is the youngest son of the state’s first governor, the late Tun Abang Haji Openg Abang Sapiee.

Below are excerpts from the interview. 

The Edge: How much capex, how much will the state need, for all the infrastructure developments that you have got planned?

Tan Sri Abang Johari Tun Openg: In the last five years, in terms of infrastructure, we rolled out RM20 billion [worth of investment]. This is just infrastructure, excluding our water supply and energy provision. So the new ones, up to the year 2030, is also a few billion ringgit. I cannot tell you the figure. I did mention multi-billion.

How about the international airport you plan to build?

It will cost a few billion [ringgit], because it is going to be seamless and it has to provide the latest digital infrastructure within the airport. Like the Doha airport.

How many runways will it have?

The details, I will leave it [for later as] the feasibility studies are still ongoing. Upon the completion of feasibility studies, then we will implement it in 2028 — that’s the target for both airport and [seaport].

So, by 2028, you will have a new airport?

No, that’s when we will implement it. To start [on it]. That one [to build], will take at least seven years. 2028, plus seven, is about 2035.

Premier, in our last interview with you (in 1Q2023), you mentioned that you wanted three things — an airport, airline and seaport. Are you happy with the progress so far?

I mentioned three things: a financial institution, Bintulu Port and an airline. So, we’ve got two already. What’s remaining is just one.

What is the progress on the airline?

Airline, hopefully by the end of the year, we’ll finish negotiations. It’s just a question of valuation. In principle, it’s been agreed on.

You’re sticking to the original plan, to take over MASwings (Sdn Bhd)?

Yes. And the federal government, through the Ministry of Transport and MAG (Malaysia Aviation Group Bhd) in principle have agreed [to it]. It’s a question of the details. You know, when you take over something, what is important is the value. So, we have to value, both sides, [and] fix the valuation of MASwings. This is ongoing.

So, apart from the three things, are there additional things that you want?

Just focus on the three first. (Laughs). One at a time! Depending on our own policy as well as our own resources.

How are the state’s negotiations with Singapore going, for the export of renewable energy?

It’s on, except for the corridor, the undersea cables. That has to be done by Singapore. Singapore, Malaysia and Indonesia have to discuss on the possibility of laying the undersea cables in the corridor itself. That is under discussion. That one is G-to-G (government to government). Because it has to pass through Indonesian waters. It is a common corridor under Asean … the Asean [Power] Grid.

Is Singapore keen on building the undersea cable?

You have to ask Singapore. Sarawak is not involved in the cable [part].

But are you already putting in place plans to generate more electricity on expectations of exporting to Singapore?

Yes. Because our target for 2030 is 10 gigawatts. So, 1gw we are going to share with Singapore, another 1gw [is] for Peninsular Malaysia.

Can you tell us a bit more about your carbon capture project?

It’s still on. The thing is this. We have our own law, incorporated already, and passed by the state legislature. But the federal government hasn’t got the law. So, what we do is we discuss with the federal government. I think they are inclined to adopt our law.

Right now, your collaboration is within the framework of so many laws. You have the land court, the Federal Constitution, etcetera. Under which laws does the CCUS (carbon capture, utilisation and storage) fall under, actually?

As far as Sarawak is concerned, the legal parameter for carbon trading — or for that matter, anything to do with oil and gas — there are five [pieces of] legislation that have to be observed or complied with. No 1 is our Sarawak Land Code because you inject the carbon in our property, that is governed by the Sarawak Land Code. No. 2, in terms of O&G activities, is based on our Oil Mining Ordinance 1958 (OMO). And this OMO has to go together with PDA 1974 (Petroleum Development Act 1974) under our commercial agreement with Petronas. So, this law entitles us to also regulate activities on O&G. No 3 is gas distribution, it is within our law. Gas distribution because before Malaysia Day, we had our legislation [on] how to regulate distribution of gas. No 4 is our Malaysian constitution. And No 5 is our Malaysia Agreement (1963).

So these are the five [pieces of] legislation, or five laws, that govern all the activities, as far as Sarawak is concerned, that are connected with O&G, including CCUS. It has to be clear, this one.

Now that Petros (Petroleum Sarawak Bhd) has taken over officially in July as the state’s sole gas aggregator, how does this change things with Petronas (Petroliam Nasional Bhd), which in the past was the one in control?

But we are working with Petronas. We don’t disturb the current agreement, arrangement, between Petronas and the customers. But then, the question of price will be agreed on by Petronas as well as Petros, because Petros is the sole aggregator. So, there is a technical committee now working out the collaboration between Petronas and Petros.

Premier, what are the updates on your sovereign wealth fund (SWF)?

For SWF, we have allocated RM8 billion and it is now just started. We are not going to touch the money for 20 years. Every year, we’ll be increasing the capital outlay, or the deposit, between RM400 million to RM600 million a year, into the fund. And we’re not going to touch it for 20 years. Any successive government also cannot disturb [it] as it is already in the ordinance, in the law. Let the sovereign fund decide [what to invest in] because there is a board there. The board is international, [comprising] people [from all over] with experience at fund managing. They will decide where to place the money.

So, they haven’t made their first investments yet?

No, we just started this year. They are still in the process.

There is talk that they will take a stake in Bintulu Port?

No. Perhaps at this moment, we are concentrating on domestic investments for the state government alone. But then, to explore investments overseas, let [the SWF] decide. Because, as you know, we are also a member of the London forum (The International Forum of Sovereign Wealth Funds) using the Santiago Principles. So, up to [the SWF], they can invest together with the other sovereign funds. [The investments] not necessarily must be in Sarawak, but may be combined with the other sovereign funds. Especially, international IPOs (initial public offerings) and other opportunities of investment in other stock exchanges of the world.

Can we be clear on that, Premier — so the mandate for the sovereign fund is to invest internationally mostly?

Yes. My mandate is [for them to] give us returns of a certain percentage [which] I don’t want to mention here. A certain percentage, you give us every year.

But the mandate is not to invest domestically?

No. For the Malaysian economy, if they feel that they want to invest in certain industries, then they can. Of course, they will ask permission from the board. What I am saying is, if there are new emerging industries where domestically we can afford [it] without using the sovereign fund … [because] we also have to invest our money, we do not want to compete, but we cannot go overseas because we do not know the market. So, for the overseas market, they (SWF) are more knowledgeable because the board members also, they come from the US as well as the UK, they are experts in this field.

But what we want is, what the state government’s mandate [to them] is, a certain percentage return must be there every year.

Having taken over Bintulu Port, are you going to increase the tariffs?

No, it’s as per normal. When the time comes that we want to review the tariff, we will review. But not now. Because, it also depends on volume of business. We have to see the market also. Sometimes, if we increase, people may go away from your port. The question here is the attractiveness and competitive rate. If we [are] too high, people may go to alternative ports.

Would you want to have your own shipping company, like your own ‘MISC’?

One [thing] at a time, let us get our airline first. But, shipping, we have two very competitive shipping lines in the Sarawak private sector — Shin Yang (Group Bhd) (KL:SYGROUP) and Hubline (Bhd) (KL:HUBLINE). Shin Yang is one of the biggest shipping alliances in the region. Out of 100 shipyards in the country, more than 60 are in Sarawak.

Would you take up a stake in Hubline?

Our economic policy is this: Activities must be driven by the private sector. We just facilitate and perhaps we may take equity through our state investment arm. Singapore is doing that, other countries are doing that. We can become partners to the private sector, in terms of equity participation, and then let the professionals run it. The hire-fire is easy, if you don’t deliver. That should be the way we run our economy.

So, are there plans to take a stake in Hubline?

No, they are doing quite well on their own, so why should we? We look at other difficult (sectors). Where the risk factor is high, the private sector has no confidence [to invest]. But, if we feel there is potential, then the state will come in [and invest], just like any venture capitalist. Let the state take risks for those things. The rest, let the private sector drive it, but it must be run professionally. We just take equity and train professionals with certain capabilities. A lot of Sarawakians overseas are coming back. You know our semiconductor [sector], the chip design, the head was in Silicon Valley, and now he is coming back to head our semiconductor company.

How would you describe the state’s financial position now?

In 2023, we achieved RM13.3 billion [in revenue, the highest ever for the state]. It surpassed the GNI (gross national income) per capita, per World Bank [classification of high-income status]. In the [current] year also, I have a feeling it’s the same. Maybe, our performance will be better than last year. Only that much I can tell you. The rest, let me reveal during my Budget.

How do you ensure your people have a fair share of the wealth?

That is why I am giving free [tertiary] education starting 2026. Because if you want people to get out of poverty, it has to be through education. So, we are giving free tertiary education in Sarawak universities to all Sarawakians, as long they have ‘K’ in their IC. They must be in certain disciplines of the new economy. We focus on technology-driven disciplines which match with our long-term policies, including banking, finance. These are things that we need. Technology, engineering, aerospace, digital infra, cyberspace, these are the new disciplines, we give them free. Then, for their Master’s, we will sponsor them to go to credible universities — Stanford, Cambridge, Imperial College. Especially to the qualified anak farmers, and rural people, who can’t afford the fees. That’s the only way to get them out of poverty.

So, the money that we have, we share with [the people], through education. You cannot have a welfare state. I don’t believe in [cash handouts].

You don’t believe in cash transfers, cash handouts?

No. I believe in the Chinese proverb — give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime. Then, it’s sustainable. If you kasi (give) cash, they makin malas lah. That’s what I believe.

But for the older folks, because we are facing an ageing society, we are going to implement a healthcare policy where we give people above 60 free health tests, we pay RM500 per person, every year. That will run into the millions [of ringgit]. But once we have got the money, why not, we share. We are all getting old too. The lifespan now is longer.

Premier, it has been more than 18 months since the unity government was formed. Are you happy with the federal government so far?

Why not? At GPS (Gabungan Parti Sarawak)  our objective is for a stable federal government. That’s why we supported all the PMs — from Mahathir, Muhyiddin, Ismail Sabri, then Anwar. That is our position. The last 18 months, we are doing quite well.

Political stability is very important. Otherwise, the whole country will be disrupted. If you keep on changing the PM, like what happened [previously] … the country is not that stable. Thank God, Sarawak is stable, so we help the federal government with whatever strength that we have, including financial strength, to develop the economy.

You wanted autonomy in education and healthcare. Are you happy with the progress?

Yes, we are happy. We recognise UEC (Unified Examination Certificate), we have English-medium schools, we have national-medium schools. To me, what is important is to give them a good education. We wanted autonomy in terms of the infrastructure for rural schools; that one there was a bit of bureaucracy. So now, the PM has agreed that for certain critical areas, the state will use our own money, they will invest later, for us to provide a good environment for students and teachers.

Imagine, the teachers from the peninsula who are transferred to Sarawak, [they need] housing quarters, facilities. You must keep in mind, once they graduate from university, they have certain expectations, but then the quarters macam reban ayam. So this is where the state comes in, but the federal [government] must reimburse because education is under [them].

Even the clinics. I have set RM100 million each for education and healthcare [clinics] to be implemented within 18 months. There is already a mechanism between the state secretary and KSU (secretary-general) of the two ministries (health and education) in terms of implementation.

Premier, what’s happening with your plan to increase your stake in Affin Bank?

Actually, we have been given the conditional approval [by Bank Negara] on June 12, and there’s some technical regulatory process that has to be completed, which shall soon be completed.

Can you share what the conditions are?

As I said, we have been given the approval, but there are certain technicalities that we have to furnish to Bank Negara. Perhaps at this moment I can’t give [examples of the technicalities] to you, but it is minor, very minor.

So, how soon do you expect to sign the sale and purchase agreement with LTAT?

There is indication that it will be finalised within one month.

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