Extracted from Malaysiakini

RM200 mil govt loan for troubled Bakun dam

Sep 26, 05 11:10am

Completion of controversial Bakun dam could be delayed by 18 months, while the government is to loan millions of Ringgit to the main contractor to offset cash-flow problems.

The government has approved the loan of RM200 million to "ease the cash-flow situation" for the contractor, a consortium of seven companies, said the Edge business weekly, citing unnamed sources.

"The RM200 million is a government loan which will be extended with interest," said a source.

The Malaysia-China Hydro Joint Venture comprises six Malaysian companies forming 70 percent of the consortium, with China's Sino Hydro at 30 percent.

The dam has been slated to be completed by August 2007 but sources told the weekly the contractor had also asked for an extension of 15 to 18 months.

"The government is looking at offering an extension of somewhere between 10 months and a year," said a source.

Dogged by delays

The dam project in Sarawak, run by dam operator Sarawak Hidro, has been dogged with delays and setbacks since its approval in 1993.

Originally billed as Malaysia's largest hydroelectric power plant, the dam has a production capacity of 2,400 megawatts and was to supply peninsular Malaysia with power.

But the government abandoned those plans in 2001 and has since been mulling ways to scale down or restructure the project.

The Edge said the power produced by Bakun would only be used to supply Sarawak and possibly Brunei, which borders the state's north.

The weekly added that Sarawak Hidro had already decided to "mothball" four of the eight turbines to reduce capacity.

The dam, initiated by former premier Mahathir Mohamad, was taken over by the government and revived in 2001 after it was shelved during the 1997-1998 Asian financial crisis when the main operator fell into debt.

The dam, which involves flooding an area the size of Singapore, has attracted fierce criticism because of its harmful impact on the environment and the fact that 10,000 residents have already had to evacuate the project site.

The Bakun dam is currently some 80 to 100 metres high, about halfway to its completed height of 205 metres, said the weekly. - AFP