Hornbill Unleashed

SARAWAK ELECTION MONITORING 2006

Fundamental questions on Bakun construction

By Sahabat Alam Malaysia

Utusan Konsumer September 2002

2002-10-05 | THE awarding of the contract to build the main dam for the Bakun Hydroelectric Project to a Sime-led consortium which also comprises a Chinese counterpart in mid August is a clear message that the Federal Government and the Sarawak State Government are bent on pursuing the project although East Malaysia is not facing any power short-age in the future and building the dam will only put a strain on the nation's finances.

Before we go any further, we would like to state that we are not an organisation opposed to development and our critical stand against the dam is not a reflection of our desire to stunt growth for Sarawak. On the contrary, we are deeply concerned on how the project has produced and will continue to produce a chain of adverse impacts, all at the expense of local peoples and local economies, the nation's finances and our natural resources.

We believe that for development to be meaningful it has to be sustainable and people-centred and it must also reflect consumption realities. Bakun's commissioning in 2006 may shoot East Malaysia's energy reserve margin to anywhere between 137 and 175 percent when a comfortable margin should only be around 30 percent.

First and foremost, we are concerned if the contract may indirectly aggra-vate the encroachment of land where Native Customary Rights (NCR) are exercised in Sarawak.

Last year it was reported that Beijing was offering Kuala Lumpur a barter agreement to buy more palm oil at a fixed price if mainland companies are given an active role in Bakun's construction. China, the second largest buyer of Malaysian palm oil, bought around 1.4 million tonnes of our palm oil last year. After it joins the World Trade Organisation, it is expected to increase its palm oil quota to 2 million tonnes a year and Malaysia is said to want a lion's share from this chunk. On August 29, it was revealed that part of the payment for the contract work on the RM1.8 billion main dam is expected to be in the form of palm oil.

Will such a deal accelerate the opening up of new plantations in Sarawak where NCR are exercised? The development of plantation projects on such land has already caused much discontent among several affected communities in recent years.

Secondly, how will money be raised for further works on the project? In the mid-1990s, foreign investors literally turned their back away from the dam as it was viewed to be lacking in financial viability and technical feasibility. It is highly unlikely that this view has changed.

Sarawak Hidro Sdn. Bhd., a subsidiary of the Ministry of Finance Inc. has proposed that the cash for the project be raised through the issuing of Government's bonds.

Thus we plead for the government to consider the issues below: