Bakun: More public money to be pumped in?

RM3 billion of your EPF money has been lent for the Bakun Dam project (Photo credit: Raymond Abin/IPS)

This news report below doesn’t sound good. The Tenaga Nasional Bhd CEO is saying that government support is needed for the Bakun Dam to be economically feasible. Is this a request for a bailout?

Remember, we already have more than a 40 per cent electricity reserve margin in the peninsula, and more dams are supposed to sprout like mushrooms in Sarawak.

Remember, they have already borrowed RM3 billion from the EPF and RM0.4 billion from the Pension Trust Fund for Bakun. Does that mean they have already lent your EPF money for a project that will not be feasible without government support?

Then there’s the whole question of the viability of the Bakun Dam, seeing how even the dam catchment areas have been logged or degraded.

And they still want to build the Murum Dam near the Bakun Dam and relocate a thousand Penan inhabitants. Where is the money for Murum going to come from?

(TheEdgeDaily) Kuala Lumpur: Tenaga Nasional Bhd chief executive officer Datuk Seri Che Khalib Mohamed Noh said government support was needed for the Bakun Hydroelectric dam to be economically feasible.

“It can take the form of a pseudo-govt support in terms of the financing or other kind of support. But to ensure that the tariff from Bakun to Tenaga is at an affordable rate there must be some support. For Bakun, it cannot be purely commercial financing,” he told reporters during the International Energy Security Forum 2008 yesterday.

When asked about the financing of the 2,100 MW Bakun dam, Che Khalib said that he had already met with a few credit agencies.

“The initial response has been quite positive,” he said, but added that the government needs to play a role as well.

To recap, Tenaga together with Sarawak Energy Bhd have put in a bid for the Bakun Hydroelectric dam project earlier this year. The two power providers are also looking to form a consortium to build an undersea cable to transmit the power from Sarawak to the peninsular. Bakun is expected to cost some RM7 billion while the cable project is expected to be another RM9 billion.

Che Khalib added that now would be an ideal time to lock in prices of raw materials if the consortium were given the go-ahead.

“Prices of materials such as steel and construction costs in general have come down,” he said.

Tenaga chairman Tan Sri Leo Moggie said that the feedback from the government on the Bakun project and undersea cable has been encouraging.

“We are expecting to hear something very soon. Bakun is important to us because without the energy from the dam, we would have to find an alternative fuel to substitute.”

“At this point, the only fuel that can be considered is coal. Finding the correct price structure would be very difficult,” said Moggie.

Moggie added however, that the recent drop in energy demand gives the national power provider some time to play with.

“The targets of 2013 or 2014 is subject to review,” he said.

On the impact of coal on Tenaga’s bottom line, Che Khalib said it was difficult to price it as no one was offering coal at a fixed price anymore.

“We already have secured our coal needs up until December next year, but the issue with it is the price. Most coal suppliers are now insisting on an index-linked price, which is determined at the point of delivery,” Che Khalib explained.