Wednesday, January 16, 2008

SIME in the making of Bintulu's future.

In 2002, Sarawak Hidro Sdn Bhd ( a wholly-owned subsidiary of the Ministry of Finance, MoF) awarded the Bakun contract to a consortium organised by Sime Darby group, called the Malaysia-China Hydro Joint Venture ( MCH - JV)



Sime Darby is a very diversified conglomerate, dealing with an extensive array of businesses locally and abroad. They are in plantations, manufacturing, heavy equipment, motor vehicle distribution, property development, insurance services, energy and trading.



In Bintulu, for instance its presence is seen in the massive tracts of land at Similajau and further into the interiors of Labang where it owns hundreds of thousands acres of oil palm plantations and palm oil refinery at Kidurong industrial estate.



More importantly , with the Bakun contract it will get to own vast reserves of Sarawak's renewal energy and export it to Peninsular Malaysia. In 2004, about 40% of Sime Engineering Sdn Bhd's revenue were derived from the Bakun contract. Here are some features of Sime's involvement in Bakun:

1) Cost overruns .. as at December, 2007 = RM 700 million.. ( and counting) from an initial contract RM 9 billion. Extra funds required by Sime are easily provided by means of a loan facility by the government of Malaysia
2) The first turbine is now expected to be operational in August 2009 after an initial schedule of August 2007.
3) On top of the generation project, Sime also is given a US 2.5 billion project to transmit the power generated at Bakun to Peninsular Malaysia ( over a 700 km submarine cable)

Who gets the contract to pull the lines from Bakun across Sarawak's hinterland is still a big question mark? The on land transmission contract from Bakun to the coastal area of Sarawak where the cables will journey undersea is still undecided. Will the cables head off to South China Sea at Bintulu, Mukah , Matadeng or Kuching? This question will be decided as much by economics and as well as Sarawak's "politics of development".

What does Bakun mean to Sarawak?

The logic of the development is that power generated will be owned by a Federal entity. But for Sarawak, the retailing of this power within the georaphical boundaries of Sarawak will be as usual given to SECSO by virtue of our unique local state laws. However, Sarawak's consumption pales when compared with Peninsular Malaysia, where the retail rights would be given to Tenaga Malaysia Berhad(TNB)

Bakun's direct benefit to Sarawak is thus the usage of about 1000 megawatts (from a total output of 2400 megawatts) for its sole consumer that is the proposed aluminium smelting plant at Similajau, Bintulu's northern most geographical region. Only with cheap electricity from Bakun is the smelting venture a feasible undertaking.

There again, with Bakun's massive supply of cheap renewable energy, it is to be awaited whether this could spell lower electrical rates for ordinary consumers of Sarawak and Bintulu in particular. Or will it mean an increase in electrical rates in order that Sime can recover its investment in Bakun?

In all probability its the old tunes back again, " Que Sera Sera, what ever will be, will be. The future is not ours to see, Que Sera Sera"

1 comment:

fnhh said...

Hi, I'm Francis from Bintulu too. Many people are worried that with the implementation of aluminium project, the air quality would be greatly declined, which could have negative impact on the health of the people. What's your opinion about that?