The Bakun dam site 200km from Bintulu

The Star has been offloading bits by bits the ‘real story’ of Bakun to the public and confirmed our suspicion that it will be another ‘white elephant’ mega projects typical of ‘Satu Lagi Projek Kerajaan Barisan Nasional’ to burden the ‘rakyat’.

Last Thursday the management of Sarawak Hidro the owner of Bakun dam invited selected media outlets including The Star for a visit. They were briefed on the project progress and rosy prediction of the dam impacts towards local communities.

Bakun dam was said to be completed? (not the first time, when it actually being delayed) by year end – more than a decade after work began in 1996.

Today, the national daily broke the news that Bakun cost would balloon from initial estimate of RM7.3bil to another billions which they didn’t dare to reveal. But here is a glimpse of the problem.

Starting next year, an additional interest payment of RM10mil per month will be incurred as the dam is already five months behind schedule for flooding. It takes seven months from the impoundment date for the dam to reach its minimum operating level to generate power.

“We have met the technical requirements for impoundment since April this year,’’ Zulkiflie told a media briefing in Bakun last Thursday.

“Impoundment must commence as soon as possible to reduce the adverse impact on costs, waiting time and staff morale,’’ he said.

Bakun location map

Funded by EPF and KWAP money

Funding for the Bakun Dam project is mainly via borrowings from the Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (KWAP); that amount has swelled to RM5.75bil, said Sarawak Hidro chairman Tan Sri Izzuddin Dali.

Sarawak’s current capacity of 1,300MW already considerably exceeds the state peak demand of 900MW, The Star said.

Even if Press Metal Bhd’s aluminum smelter, the first company expected to be operational in Samalaju SCORE zone, it would only take up 90MW!

It is very likely the total installed capacity 3,344MW (Bakun 1,770MW and Murum 650MW) will be wasted.

Bakun also unlikely to be Sarawak’s ‘cash cow’ as The Star trumpet earlier. Instead it will be another ‘white elephant project‘ a typical of Barisan Nasional mega projects.

In fact the state government is yet to get firm commitments from SCORE potential investors. Sarawak Hidro and Sarawak Energy will have a meeting end of this month to discuss the project costs.

“Once the costs are adopted, we will proceed onto the financial models and hope to seal the tariff rates by the end of the year,’’ The Star quoted Zulkiflie as saying.

The issue of tariffs has become a thorny matter with Sarawak Energy looking at just below 8 sen per KwH while their heavy offtakers – the aluminium smelters – are only talking of slightly less than four US cents (13.6 sen on an exchange rate of RM3.40 to the dollar) per KwH.