Malaysia to proceed with controversial Bakun dam project
Malaysia to proceed with controversial Bakun dam project
Agence Fraance-Presse Kuala Lumpur
Malaysia will proceed with its controversial plan to build the 4.5 billion ringgit (US$1.2 billion) Bakun dam in the jungles of Borneo but the existing project will have to be restructured first, deputy prime minister Najib Razak said on Monday.
"It is on, except we will look at how we want to restructure it. It is on, it is not off," he told an economic conference.
"This government will continue to prioritize our plans based on affordability and cost and the impact on long term competitiveness and benefits to society," Najib added.
There has been speculation in the past that the government planned to pull out of the controversial project in eastern Sarawak state on Borneo island.
But Najib said the government was carrying out a review of the planned dam.
"We are undertaking a review of the Bakun hydro-electric project to see how we can best undertake it based on our future energy needs," he said. Najib did not elaborate.
Nor Mohamed Yakcop, second finance minister said the government now planned to hold a 100-percent stake in the dam after previously considering selling a stake to an aluminum smelter.
When asked if that meant the government had now ruled out the possibility of selling a stake in the longer term, he said: "Of course anything can happen in the long term. But for the time being, the government will own Bakun."
Asked if the government intended to scale down the project, Nor Yakcop said the Cabinet would decide that later.
A local news report earlier this year said consideration was being given to scaling down the size of the project because of a lack of firm takers for power, apart from the aluminum smelter.
The smelter is part of a $2 billion project in eastern Sarawak state by GIIG Capital, which is controlled by tycoon Syed Mokhtar Albukhary. The fate of this project itself is in question after its Dubai-based partner pulled out last December.
The government has been scaling back on major infrastructure projects since Prime Minister Abdullah Ahmad Badawi took over last October from predecessor Mahathir Mohamad who had favored such schemes.
The dam, which was initiated by Mahathir, 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.
Sarawak Hidro Sdn Bhd, the operator of the dam has so far spent about 1.5 billion ringgit and the project is expected to eventually cost 4.5 billion ringgit.
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.