Malaysia to build controversial dam

Malaysia's prime minister has said the government will proceed with the huge Bakun hydroelectric dam, but has not decided whether to privatise the project.

    Badawi is not sure whether to privatise the dam project

    Abd Allah Ahmad Badawi's comments came after tycoon Syed Mokhtar Albukhary made a bid for the project.

    H

    is GIIG Capital signed an agreement to buy a 60%

    stake in dam operator Sarawak Hidro

    for $249 million.

    The government took over the controversial 2400 megawatt Bakun

    scheme on Borneo island and revived it in 2001 after it was shelved

    when the main operator

    fell in debt.

    The tycoon's move is aimed at ensuring power supply to a $2 billion

     aluminum smelter to be developed by GIIG in

    Sarawak by 2007. GIIG is jointly owned by Syed Mokhtar and

    Dubai-based Muhammad Ali Alabbar.

    'Second thoughts'

    "We still want to go ahead with the Bakun project. We don't want

    to abandon it. The approach we will take has yet to be decided as

    our officers are still looking at various aspects of the project"

    Abd Allah Ahmad Badawi,
    Malaysian prime minister

     

    But sources told the Edge weekly newspaper that the agreement

    had lapsed because GIIG failed to fulfill certain conditions by a 15 

    October deadline.

    They added the government was having "second thoughts"

    about selling Sarawak Hidro.

    Badawi, who is also finance minister, confirmed the government

    was "not sure yet" whether it would keep control of the mammoth

    project.

    "We still want to go ahead with the Bakun project. We don't want

    to abandon it. The approach we will take has yet to be decided as

    our officers are still looking at various aspects of the project," he said on Tuesday

    .

    On plans to sell Sarawak Hidro, he said there had been "no

    decision yet" and he was waiting for more detailed reports.

    Sale on track

    "The project must go on but there are some details with regards

    to the implementation of the project that I'd like to see and to

    know more about." 

    Tuesday's Business Times quoted GIIG co-owner Muhammad Ali as

    saying the company had satisfied all the conditions required and the

    sale of Sarawak Hidro was on track.

    "Everything is moving as scheduled. I am happy with the

    progress," he told the daily.

    "Everything is moving as scheduled. I am happy with the

    progress"

    Muhammad Ali,
    GIIG co-owner

    But the Edge said it learned other companies had submitted new

    project proposals to the government.

    These included a joint-venture between Malaysian Resources Corp

    and Sweden's Asea Brown Boveri, which proposed reviving plans to

    build 1600 megawatt submarine cables

    to transfer power to peninsular Malaysia.

    Environmental problems

    Malaysia dropped plans for the world's longest undersea cable

    network to cut costs after it revived the project.

    The total project cost is unclear at this stage, with reports

    citing more than $2 billion at the time of its revival, but The Edge

    pegged it at only about $1billion.

    The dam, which involves flooding an area the size of Singapore,

    has attracted fierce criticism for its likely effect on the

    environment and 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.

    SOURCE: AFP


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