BAKUN PROJECT REVIVED: MALAYSIAN CONSUMERS AWAKE!
By Dr Kua Kia Soong, Director of SUARAM, 6 March 2001
Malaysians who are all smarting from the announcement of 50-100 per cent increase in water
tariffs even before the Sg. Selangor dam is ready, should wake up to what’s in store for them in
electricity tariffs when the Bakun project gets going.
Malaysian consumers should be reminded that we have already paid nearly RM1 billion to the
failed businessmen who, the Malaysian government told us earlier were capable of handling the
Bakun dam project without public money. Our EPF has also thrown good money down the drain
by providing soft loans to these failed Bakun HEP contractors. The worst dividends by EPF since
the seventies can be attributed to these generous soft loans to failed businessmen as well as
dubious flings on the stock market.
Malaysian consumers should ask these questions:
1. Where will the money come from?
If the Sg. Selangor dam project is anything to go by, we see that Puncak Niaga has pulled out of
the project and Gamuda is having problems with their road projects as well. Very soon the main
contractor will have to be bailed out because the government will explain that theirs is an
“essential service”.
Although the government claims that the cost of the Bakun project has been cut to less than
RM10 billion, international financiers reckon that the cost is closer to RM20 billion. Based on the
previous cost breakdown of the Bakun project, the submarine cables made up two-thirds of the
total cost. The Government now says that, without the cables, the new dam project alone will cut
the cost by only one-third. Malaysian consumers should demand an explanation.
The original justification by the Government for the Bakun project – that no government would be
involved – has been violated. We’ve been told that the project will proceed in stages. What is
likely to happen, as with many other such projects, is that these contracts will be farmed out to
foreign contractors.
2. Questioning the Costs
Foreign contractors are famously expensive and not necessarily very competent. The British
House of Commons Select Committee Report on the Pergau HEP project concluded that:
“Pergau, at the higher price of 397 pound sterling, would be ‘a very bad buy’ and a burden on
Malaysian consumers.” (UK National Audit Office, London 22 October 1993)
The contractor for the Pergau dam was Balfour Beatty/ Cementation International.
On 17 December 1990, I raised the scandal of Malaysian consumers having to pay RM 1 billion
for seven gas turbines at Paka when they should have only cost RM500 million. I have also
questioned the cost of the two treatment plants charged by Splash in the SSP3 project, ie.
RM900 million, when they should only cost half that sum. The list goes on ad nauseum.
Our local contractors who get the concessions invariably farm them out to foreign contractors. But
these foreign contractors are not necessarily competent. Dong Ah, the South Korean company
handling the diversion tunnels at Bakun is responsible for the collapse of the Songsu bridge in
Seoul a few years ago. Lahmeyer, a consultant in the last Bakun project was involved in the
Chixoy HEP at Guatemala, while Harza, another consultant in the last Bakun project was linked
to the problems of the Tarbela dam in Pakistan.
Malaysian consumers should also ask: If the Government cannot properly maintain the two dams
at Cameron Highlands and Kenyir, which are plagued by heavy siltation and hyacinth
proliferation, how are they going to be able to handle the Bakun dam which will be even more
prone to soil erosion and siltation?
3. Tell us the Impending Electricity Tariffs Now!
The Government is the regulator of electricity in the country and should tell consumers the tariffs
that will be charged in the near future when the Bakun project gets going. The estimate must be
calculated and electricity tariffs must not be sprung on to consumers in the way the water tariffs
have been sprung on us recently.
Under the last Bakun project, Ekran was going to sell Bakun power at more than 18 sen when the
other Independent Power Producers are already selling at the astronomical 15.5 sen to TNB,
whose production cost was only 9 sen! If hydro production is supposed to be so efficient, why
should Bakun energy cost so much?
To be fair to consumers, there should be established a Utilities Commission in the country since
consumers are at the mercy of highway toll, water and electricity monopolies. To justify tariff
increases, there should be public audits of these contractors and concessionaires. As it is,
consumers are not compensated when there are so many fiascoes involving water and power
cuts, muddy water or power surges.
As for the dam projects, there must be comfort guarantees for consumers and downstream
residents in the event of a dam collapse or diversion tunnel collapse. Can we sue? Judging by the
course of the Highland Towers collapse, that redress is not straightforward.
4. Consumers Demand Transparency
Based on the record of the Selangor and Sarawak State Governments, they cannot be trusted
with costs nor safety because of conflict of interests. The involvement of the children of the
Sarawak Chief Minister in the Bakun project is well known. The Fact-Finding Mission to the
Resettlement Scheme at Sg. Asap to which the Bakun indigenous peoples have been displaced,
has uncovered the scandal that they were moved there even when the State Government agency
had failed to obtain a Certificate of Fitness for the scheme.
So is the involvement of KDEB, the Selangor State Government’s subsidiary in the Sg. Selangor
dam project. Thus far, the Emergency Response Plans of the Selangor and Bakun dams have
not been made known to the residents downstream. I have questioned the adequacy of soil tests
done on the reservoir site of the Sg. Selangor dam and reiterate my call to the federal
government to verify these tests.
5. Consumers Deserve a Responsible National Energy Policy
The manner in which the Bakun dam has been justified – from the original 2400MW with
submarine cable to West Malaysia, to a downscaled 500 MW dam, now back to 2400MW without
submarine cable – smacks of very irresponsible policy making. Almost certainly, no serious
attempt has been made to justify the project in terms of energy needs and supply.
The original submarine cables were justified by the claim that Bakun HEP would be supplying
West Malaysia. Now we are told that the surplus energy will be used instead for Sabah, Sarawak,
Brunei and Kalimantan. Has there been a strong commitment from Brunei and Indonesia or are
we just hoping there will be a demand in the future? There is no reason why Indonesia should
want our energy when they have access to cheap waxy crude in Kalimantan.
If this homework has not yet been done by the Malaysian Government, it is very irresponsible
planning and Malaysian consumers will be paying for this folly in the near future.
I have pointed out in my 1996 publication, ‘Malaysia’s Energy Crisis: The Real Issues’ that the
problem with the Malaysian energy industry is one of mismanagement. How else do we justify
more than 10,000 power breakdowns a year when there is a reserve margin of more than 50 per
cent? There is also a problem of wrong priorities in favour of Independent Power Producers. This
has resulted in a totally irresponsible policy that encourages electricity consumption in order to
keep TNB’s profit margin healthy rather than encouraging energy conservation.
A responsible National Energy Policy should first produce an energy needs inventory giving
reliable data on production and use by domestic and industrial sources, encouraging energy
savings and more renewable sources of energy production.
There are other options to trying to be the energy super producer of the region and screaming the
Ah-Q-esque “Malaysia Boleh”! We can try to be an energy supermarket instead by relying on
cheap Burmese gas, cheap waxy crude from Kalimantan and also cheap power from Thailand. All
this cheap power can help to fuel the much talked about ASEAN grid.
Whatever happened to the much touted “paradigm shift” by our nation’s leaders?
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Kua Kia Soong <kuaks@djz.edu.my>
Tel: 87362337