Extracted from Malaysiakini

Extracted from Malaysiakini.com

Top tycoon may fail to gain control of Bakun dam project

10:48:50 AM Nov 17, 2003

Tycoon Syed Mokhtar Albukhary's plan to take control of the huge Bakun hydroelectric dam project in eastern Sarawak state is unlikely to be successful, sources told the weekly Edge newspaper.

Despite intense lobbying, sources said the authorities were having "second thoughts" on whether to sell Sarawak Hidro, the main operator of the 2,400 megawatt Bakun project, to Syed Mokhtar's GIIG Capital for RM945.42 million.

The Edge said an agreement signed on August 30 for GIIG to buy a 60 percent stake in Sarawak Hidro from the Minister of Finance Inc has lapsed because it failed to fulfill certain conditions by an Oct 15 deadline.

"It may be better for the government to control something as big as Bakun," said a source.

The weekly said it learned that other companies have submitted new project proposals to the government.

This included a joint-venture between Malaysian Resources Corp and Sweden's Asea Brown Boveri, which proposed to revive plans to build 1,600 megawatt submarine cables at a cost of RM9.1 billion to transfer power to peninsular Malaysia, it said.

If true, the news is a blow to GIIG, which plans to develop a RM7.6 billion aluminum smelter in Sarawak on Borneo island by 2007. The smelter reportedly needs to consume up to 50 percent of the power output from the Bakun dam.

GIIC is jointly owned by Syed Mokhtar and Dubai-based Mohamed Ali Alabbar.

Tycoon to act in his own interest

But the Edge, in an editorial, said this would be a "fortuitous turn of events" because the government can keep control of the Bakun project and ensure that the sale of power was made at more competitive prices.

This will not be possible if Syed Mokhtar owns Sarawak Hidro because the tycoon will be compelled to act in his own interest and to sell power to his own smelter, it added.

Malaysia revived the controversial Bakun dam project, which involves flooding an area the size of Singapore, in 2001 after it was shelved during the 1997/98 Asian financial crisis but dropped plans to build the world's longest undersea cable network.

The cost of the Bakun dam was at the time reported to have been scaled down to nine billion ringgit but the Edge put the project cost at only RM4.5 billion.

The size of the dam has attracted fierce criticism for its likely effect on the environment and on around 10,000 locals who have already been moved out of their homes. Environmentalists say the dam's capacity far exceeds future power needs in Sarawak. - AFP