Bakun hydroelectric skyrocket again RM820 million

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KUALA LUMPUR, May 7 — Officially priced at RM7.46 billion, the Bakun hydroelectric dam project in Sarawak is likely to skyrocket again as contractors claim a whopping RM820 million from its chief promoter, state-owned Sarawak Hidro Sdn Bhd, The Edge Financial Daily reported today.

However, the final price for the long-delayed dam project is yet to be determined.

It also reported government sources familiar with the ongoing negotiations as saying that Sarawak Hidro, a wholly-owned subsidiary of the Finance Ministry, is willing to pay just over RM100 million while its consultants, who were unnamed, disclosed that IMPSA’s claims have been rejected.

A joint-venture company led by Sime Darby, the Malaysia-Sino Hydro Corp joint Venture (MCHJV), has put in claims totalling RM670 million for civil works while another consortium of contractors supplying turbines led by Argentina’s IMPSA group is seeking to claim RM140 million, the daily reported, quoting financial executives close to the project.

“Both claims are still subject to negotiations between Sarawak Hidro and the respective parties. Ultimately the decision will come from the Finance Ministry,” the paper reported an unnamed senior construction industry executive involved in the project as saying.

The latest claims come at a time when Sarawak Hidro is desperately looking for buyers for power to be generated by the dam, the daily reported.

Rio Tinto, the world’s third largest miner, and Cahya Mata Sarawak, a financial and construction conglomerate based in Sarawak, announced on March 27 this year they have scrapped plans for a US$2 billion (RM6.1 billion) aluminium smelter project in Sarawak as power supply terms could not be finalised.

The aluminium smelter was to have been Bakun’s biggest customer, The Edge Financial Daily reported.

The dam project, first awarded to Ekran Bhd in 1994, was scheduled to have been completed in 2007 but has been plagued by various problems including the 1997 Asian financial crisis.

Inaccurate soil studies y Sarawak Hidro further complicated civil works portion of the dam, the business daily reported.

The mammoth project has also been downsized, with an undersea cable supplying power to Peninsular Malaysia scrapped.