Bakun Dam
The Bakun Dam is an embankment dam located in Belaga District, Kapit Division, Sarawak, Malaysia, on the Balui River, a tributary or source of the Rajang River and some sixty kilometres east of Belaga. As part of the project, the second-tallest concrete-faced rockfill dam in the world would be built. It would generate 2,400 megawatts of electricity once completed.
The purpose for the dam was to meet growing demand for electricity. However, most of this demand is said to lie in Peninsular Malaysia and not East Malaysia, where the dam is located. Even in Peninsular Malaysia, however, there is an oversupply of electricity, with Tenaga Nasional Berhad being locked into unfavourable purchasing agreements with Independent Power Producers. The original idea was to have 30% of the generated capacity consumed in East Malaysia and the rest transmitted to Peninsular Malaysia. This plan envisioned 730 km of overhead HVDC transmission lines in East Malaysia, 670 km of undersea HVDC cable and 300 km of HVDC transmission line in Peninsular Malaysia.
Future plans for the dam include connecting it to an envisioned Trans-Borneo Power Grid Interconnection, which would be a grid to supply power to Sarawak, Sabah, Brunei, and Kalimantan. There have been mentions of this grid made within ASEAN meetings but no actions have been taken by any party. Bakun Dam came online on 6 August 2011. As of 2015, Bakun Dam is the biggest dam in Southeast Asia.
On 16 August 2017, Sarawak Energy completes acquisition of Bakun HEP from Federal Government. Under the deal, the Sarawak government will pay Putrajaya RM2.5 billion and take over the remaining RM6.4 billion remaining debts. Prime Minister Najib Razak handed over the dam to the Sarawak government on 5 April 2018.
Project history
First attempt
Initial survey was conducted in the early 1960s and more studies were conducted in the early 1980s. The studies cover the masterplan and feasibility report, rock and soil studies, hydro potential, detailed design and costing, environmental and socio-economic studies and HVDC transmission studies. Notable consultants involved were SAMA Consortium German Agency for Technical Cooperation, Snowy Mountains Engineering Corporation and Maeda-Okumura Joint Venture, Fichtner and Swedpower Swedish Agency for Technical Cooperation.Although the project was first approved by government in 1986, it was shelved in 1990 owing to decreased projection of electricity demand due to the recession of 1985 and the decision to use the then low-cost alternative of natural gas as fuel for developing the petrochemical industry.
Second attempt
It was revived in September 1993 by the Malaysian Federal Government led by then-Prime Minister Mahathir Mohamad. In January 1994, a privatised contract was awarded to Ekran Berhad. In April 1995, Ekran completed the EIA of the project. The project was to cost US$2.4 billion and was originally scheduled for completion in 2003.The dam was to be built beginning in 1994 by a privatised joint-venture consortium called Bakun Hydroelectric Corporation, comprising Ekran Berhad, Tenaga Nasional Berhad, the government of Sarawak, Sarawak Electricity Supply Corporation, and Malaysia Mining Corporation Bhd.
Ekran awarded the electromechanical works and the transmission portion to ABB. ABB's consortium partner for the civil works will be Companhia Brasileira de Projetos e Obras of Brazil, a large civil engineering company belonging to the Odebrecht Group, responsible for the construction of the dam and power house. Engineering consulting firms involved in the project then were TNB Hydro, a subsidiary of Tenaga Nasional Berhad and KLIA Consult.
Ekran launched a rights issue to finance the building of the dam, but it was undersubscribed and Ting Pek Khing had to put up $500 million to take up the unsubscribed portion as part of his agreement with the underwriters. Ekran was a company of Ting Pek Khing, himself a timber businessman. Neither he nor his company had built a dam before. The entire project was not tendered publicly, and instead was awarded by government contract.
The project was halted in 1997 in the face of the Asian financial crisis. When the project was shelved, the Malaysian government took back the project from this consortium. By this time, RM1.6 billion had already been paid out by the government. RM700 million to RM1.1 billion was paid as 'compensation' to Ekran, according to figures disclosed in Parliament. The completed works were the river diversion tunnels by Dong Ah of Korea for RM400 million, and to Global Upline for work completed on the auxiliary cofferdams for RM60 million. Other works are for selective clearing of biomass, and relocation of the affected native residents. The government had also turned over RM1 billion for the purchase of eight turbines.
Third attempt
In May 2000 it was revived through a 100% government-owned company, Sarawak Hidro, but the transmission of power to Peninsular Malaysia was not part of the revived project. The construction work was tendered out as a turnkey contract. The completion date has been revised to February 2008.The new civil builder is the Malaysia–China Hydro JV consortium, led by Sime Engineering Berhad of Malaysia (a subsidiary of Sime Darby and Sinohydro Corporation of China. Other members of the consortium are WCT Berhad, MTD Capital, Ahmad Zaki Resources, Syarikat Ismail and Edward & Sons. It targeted a completion date of September 2007. The total sum to be paid to this consortium was budgeted at RM1.8 billion. The electromechanical works for the turbines were awarded in two contracts to IMPSA of Argentina and Alstom of France.
In 2004, engineering consulting firm JR Knowles, was hired to study the delays in construction. Other engineering consulting firms involved in the project were Snowy Mountain Engineering Corporation, of Australia and Opus International Malaysia.
Items of temporary interest during third attempt
In May 2004 Ting Pek Khing's name again was raised in connection with the project. A Ting-owned company, Global Upline, was rumoured to have been awarded a contract to undertake "biomass removal" in the flood basin. This would allow him to harvest timber in the area without a separate permit. Issuance of timber permits has come under increased scrutiny due to political conditions and environmental concerns. However, as of December 2006 it has not been awarded.Usage of the generated capacity was to have been by a proposed aluminium smelting plant in Similajau, near Bintulu, approximately 180 km inland from the dam. The project is a joint venture between Dubai Aluminum Co, Ltd and Gulf International Investment Group, an investment fund jointly set up by Malaysian tycoon Syed Mokhtar, and Dubai-based international financier Mohamed Ali Alabbar. This plant was expected to consume 50% of the power generated. The government has agreed in principle that 60% of Sarawak Hidro, the entity that owns the dam, will be sold to GIIG. Owing to delays in dam construction, the plans for the smelter have since been shelved. The agreement for this smelter was originally signed in 2003 and some conditions have lapsed owing to delays in construction. Rio Tinto announced in August 2007 that they had signed a deal with Malaysian conglomerate Cahya Mata Sarawak Berhad to build an aluminium smelter. The production capacity would be 550,000 tonnes initially with expansion to 1.5 million tonnes possible. Production of aluminium would start at the end of 2010.
At the end of 2004, the minor partners in the Malaysia–China Hydro JV consortium will report quarterly losses due to the Bakun project. Discounting this project, they would all be operating profitably for the quarter.
- For Ahmad Zaki Resources Bhd, this is the first time it will report losses since 1993. Ahmad Zaki estimates net losses suffered for nine months ending 30 September 2004 at RM4.55 million.
- WCT has reported a net loss of RM13.08 million for the quarter ending 30 September 2004 due to the Bakun project.
- MTD Capital reported a RM4.04 million loss in the quarter ending 30 September 2004 and attributed it to "a major project undertaken by the company in joint venture with both local and foreign partners" without specifically naming Bakun.
- The lead partner in the project, Sime Engineering reported a profit of RM521,000 for the same quarter versus a profit of RM4.18 million for the same quarter in 2003. Declines in profit were attributed to cost overruns and project delays.
In November 2007, Sime Darby, the parent company of the contractor Sime Engineering will be merged with Golden Hope and Guthrie into a new company with a market capitalisation of RM31 billion. Concurrently with the merger, the contractor Sime Engineering will takeover the ownership of the Bakun Dam project.
Sime Engineering Sdn Bhd has filed a suit against AZRB over alleged breaches in the Malaysia–China Hydro joint venture agreement dated 12 June 2002 relating to the Bakun dam. AZRB was served with a writ summons and statement of claim dated 12 Oct by Sime Engineering claiming "RM15.24 million for alleged breaches by AZRB of the Malaysia–China Hydro JVA" relating to Bakun hydroelectric project package CW2 – main civil works.