Malaysia scraps coal plant plans on environment worries

KUALA LUMPUR (Reuters) - Malaysia has scrapped plans to build a 1.3 billion ringgit ($408 million) coal-fired power plant in eastern Sabah state on Borneo island due to worries it would pollute the environment, a newspaper reported on Wednesday.

The 300MW-plant was to have been built near a tropical forest by a subsidiary of state-controlled utility Tenaga Nasional and a Sabah state government agency, The Star reported on its Web site.

"After weighing the pros and cons, the cabinet decided to do away with the proposal because we do not want to risk the welfare of the communities in the area including their health and any adverse impact on the environment," Sabah Chief Minister Musa Aman was quoted as saying.

He asked Tenaga to look for other sources of energy for Sabah.

Tenaga spokesman Sidek Kamiso said the company had not been officially notified of the government's decision.

($1=3.187 Malaysian Ringgit)

(Reporting by Liau Y-Sing, editing by Jacqueline Wong)