BAKUN DAM PROJECT TO PROMOTE GROWTH OF POWER INDUSTRY

By Christine Lim

KUALA LUMPUR, Oct 13 (Bernama) -- Though the proposed Bakun Dam in Sarawak
has generated protests and controversies, some analysts believe the project is
vital for the growth of the power industry.

Once completed, it will be the largest dam in the region outside China.

"With the assumption of Bakun supplying 1,700 megawatts at 11 sen per unit,
it would generate an annual revenue of close to RM1.6 billion (US$471.8
million)," MIDF head of research Zulkifli Hamzah told Bernama.

Recently, the project attracted attention among the media and
environmentalists due to the impact on indigenous communities who have to be
evicted from their homes to pave way for the building of the 2,400-megawatt
Bakun Dam and other hydro-electric dams in Sarawak.

While the environmental risks have been debated, the project is likely to
proceed as planned with the benefits expected to outweigh risks, Zulkifli said.

"Power generated by hydroelectric means has been proven to be cost-efficient
and stable," he said.

He added that unlike coal, hydroelectricity is a sustainable and renewable
form of energy source.

Energy, Green Technology and Water Minister Peter Chin Fah Kui has said that
the government was committed towards ensuring the successful roll-out of the
project which is expected to be fully commissioned by 2012.

OSK head of research Chris Eng said the Bakun Dam is expected to be able to
start generating electricity by 2011 with supply for Sarawak.

"By 2015, it will be able to export electricity to Peninsular Malaysia," he
told Bernama.

According to Zulkifli, the question of excess capacity is not a major
concern as Malaysia will be able to export the power supply to neighbouring
countries.

"On a larger scale, there is the proposed Asean Power Grid, of which the
Bakun Dam is one of the 14 interconnections projects and one of the major
sources of power generation," he said.

In 2003, heads of the Asean power utilities authorities conducted an Asean
interconnection master plan study which resulted in a proposal for electricity
interconnections to be established between 2007 and 2020.

The study's main goal was for the Asean electricity power interconnection
master plan to meet the need for supply, distribution and transmission,
security, and opportunities for electricity trading between Asean countries.

The Bakun Dam will require the laying of undersea cables to transmit
electricity to locations outside its site in Sarawak and be part of the
interconnecting power hub.

"On the issue of the laying of undersea cables across Indonesian waters, it
is likely that both governments will undertake a memorandum of understanding to
address any concern," Zulkifli said.

He said it was in the interest of both countries to ensure the success of
the project.

The Bakun Dam, a concrete face rockfill dam 205 metres in height and 740
metres in length, is expected to have the capacity to flood an area the size of
Singapore.

The project was revived after being suspended in 1997 with the outbreak of
the Asian financial crisis.

Cost factors have also been a stumbling block due to the delay in starting
the project and the rising prices of building materials.

Zulkifli said that based on estimates, the cost of Bakun dam alone,
excluding the undersea cables, stood at RM6 billion (US$1.8 billion).

"Like any other mega-project, cost overrun is something that is unavoidable
but it is likely to be kept at a minimum," he said.

Eng said cost of the undersea cables to connect Bakun to Peninsular Malaysia
is estimated to be about RM9 billion (US$2.7 billion).

According to him, the operational cost for running the Bakun Dam will be
lower compared to a coal-, gas- or fossil fuel-based plant but construction cost
of the dam will be higher.
-- BERNAMA