MAC: Mines and Communities

Malaysia says giant Bakun dam under review

Published by MAC on 2004-07-26

It's perhaps the most damaging dam-building plan anywhere. that hasn't yet made it to construction. For well over a decade the Bakun dam proposed for Sarawak (Malaysian Borneo) has aroused huge opposition, both from within the state and across the world.

Now the Malaysian government confirms its intention to proceed with a "restructured" project although it will still uproot thousands of indigenous people and flood a vast area of rainforest.

At least half the prospective power generated looks like going towards aluminium smelting - itself an enormous threat to the region's ecology and health. Initially Rio Tinto (Comalco) said it could buy into a Bakun smelter; more recently BHPBilliton has indicated its interest in taking a stake.

Malaysia says giant Bakun dam under review

Reuters - July 26, 2004

Kuala Lumpur - Malaysia said on Monday it would go ahead with its giant, controversial Bakun hydroelectric dam in the jungles of Borneo but said the project, under review for its economic viability, needed restructuring.

"It is on, except we will look at how we want to restructure it. It is on, it is not off," Deputy Prime Minister Najib Razak Najib told a conference in the Malaysian capital, Kuala Lumpur, referring to the $2.4 billion, 2,400 megawatt dam.

The dam, being built in the East Malaysian state of Sarawak, is the brainchild of former prime minister Mahathir Mohamad who favoured mega-projects to help speed the developing country towards rich-nation status.

Critics say the dam, which would flood an area of rain forests the size of nearby Singapore and displace thousands, would generate far more electricity than the rural state would need when completed. Earlier on Monday, Najib said the government was reviewing the viability of the dam, after media reports this year said the project might be scaled back.

"We are undertaking a review of the Bakun hydroelectric project to see how we can best undertake it, based on our future energy needs," Najib said. "This government will continue to prioritise our plans based on affordability and cost and the impact on long-term competitiveness and benefits to society."

In January, a local business weekly said Malaysia was looking at potentially halving power output from the dam because of uncertainty over demand. Apart from an aluminium smelter set to take 1,000 MW of power from the dam, there are no firm takers for the remaining power, the weekly said, quoting unnamed sources.

Prime Minister Abdullah Ahmad Badawi, who took over from Mahathir last October, gave the green light to Southeast Asia's biggest hydroelectric dam early this year, but the government aborted a deal to sell a controlling 60 percent stake in the project to tycoon Syed Mokhtar Albukhary.

Syed Mokhtar has plans for a $2 billion, 500,000-tonne-a-year aluminium smelter in Sarawak due for completion in 2007, through a joint venture with Arab businessman Mohamed Ali Alabbar.

© Reuters Limited

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