Sarawak's Bakun raises development, corruption questions

February 16, 2012
Sarawak's hornbill rises over the Bakun Dam

Asia'a second largest hydroelectric project, the Bakun dam on Sarawak's Balui River, has been revealed to be running at well under capacity since it came online in August last year.

A report aired on global news broadcaster Al Jazeera yesterday found the plant running only one 150-MW turbine out of the three that are currently operational. Another five turbines are due to be commissioned so that by next year Bakun will have a capacity of 2.4-GW. Sarawak's current level of peak electricity demand is, however, less than a gigawatt.

The dam has been labeled a "monument of corruption" by Transparency International due to massive profits made by companies close to the family of Sarawak Chief Minister Abdul Taib Mahmud (Taib).

As originally conceived, the USD2.4 billion project – funded mostly by loans from Malaysia's public pension fund – was supposed to be connected to Peninsular Malaysia via a 670 km undersea cable, but this plan was shelved in the 1990s. The Sarawak government says the surplus capacity will be used by industry, particularly aluminum smelters, attracted by the abundant and cheap electrical power.

A smelter project led by Dubai Aluminum was shelved a few years ago due to delays in the dam's construction. Another three joint-venture smelter projects are reported to be in the pipeline: one between Taib-controlled Cahya Mata Sarawak and Rio Tinto Alcan; another involving GIIG Holdings Sdn Bhd and the Aluminum Corp of China Ltd; and most recently a JV singed last June between 1 Malaysia Development Berhad and Abu Dhabi's Mubadala Development Company.

The prospect of having three large new aluminum smelters in Sarawak, in addition to a smaller smelter already in operation, is raising environmental concerns. Aluminum smelting is a dirty business, creating air pollution and contaminated wastewater and slag, although newer technologies are available to reduce them.

And the question remains why Sarawak, which has a population of less than 2.5 million, needs this kind of heavy industrial investment?

More alarming among environmentalists, however, is the state government's plans to add a further 7-GW of hydroelectric generating capacity in the coming years through the construction of another 12 dams.

Even before the completion of Bakun, secret construction works for the 944-MW Murum dam had commenced and is scheduled to be completed by the end of next year. The MY3.5 billion (USD1.14 billion) project is being built by China's Three Gorges Project Corp with Sinohydro Corp Ltd as the main sub-contractor.

In response to these plans an international NGO coalition that includes organizations from the US, Norway and Switzerland is supporting Malaysian groups who are protesting against further hydroelectric dam development in Sarawak.

The Bruno Manser Fund (Switzerland), International Rivers (US), Borneo Project (US), Rainforest Action Network (US) and the Rainforest Foundation (Norway) are emphasizing the adverse social and ecological consequences of the planned dams and question their economic viability.

They claim that just a handful of companies connected to Taib and his family are likely to benefit from these projects, due to their involvement in the construction business, while the Sarawak public would have to cover the costs in the form of long-term state debts.