By YAP LENG KUEN lengkuen@thestar.com.my
PETALING JAYA: Sarawak Energy Bhd (SEB) is looking at whether to buy or lease the 2,400MW Bakun Dam in its long-term bid to develop the hydropower and industrial sectors in the state.
It is understood that SEB hopes to reach an agreement with Sarawak Hidro Sdn Bhd, the owner of the dam, and the Finance Ministry, which in turn owns Sarawak Hidro, in one or two months’ time on the preferred option.
In the long term, leasing could turn out to be more expensive while a purchase based on deferred payments could be more feasible.
The issue here is that the Federal Government is said to be hesitant to sell power at too low a price while SEB may be unable to pay the “equitable’’ price, bearing in mind that it has not got the critical mass of investors that will take up the power.
Caught in this “chicken and egg’’ situation, it could be more feasible to instead buy up the dam with an upfront payment and subsequent staggered amounts subject to the usage of power.
“The purchase price is being discussed,’’ said an industry source. “But in view of the fact that the Bakun Dam took so long to build, there are certain costs that SEB will likely not want to pay.’’
The tariff talks, which are about to commence following the endorsement of technical details on the term sheet, will likely determine the yearly payments that SEB would have to make under the purchase scenario.
However, it is not known if the Federal Government would accept the deferred payment proposal or if it had in mind some other mode of payment or trade-off.
Among Sarawak Hidro’s main concerns is that the Government must be able to service its loans for the Bakun Dam, which come up to over RM3bil before adding interest and some operational costs.
According to Sarawak Hidro managing director Zulkifle Osman, the final cost of development is estimated at RM7bil. Out of the capacity of 2,400MW, the Bakun project is capable of producing anytime firm energy of 73% representing 1,770MW.
Gestation period
The problem is that even if SEB can procure the commitment from investors to set up their industries, the gestation period for many of these plants can be quite long.
Both parties would also be looking at a certain margin that includes tranmission costs for SEB and a rate of return for the Federal Government.
The smelters and industries, especially in the Sarawak Corridor of Renewable Energy, are also reported to be putting pressure on SEB to come up with “cheap’’ power although SEB is trying to convince them that it is the total package that counts, not just the price of the power.
With dam impoundment or flooding to commence soon, there is an urgency to solve these issues, especially relating to investors, before the first turbine starts generating in the first half of next year.
According to Zulkifle, Sarawak Hidro is getting co-operation from the relevant agencies to submit undertaking documents for the window to impound at appropriate levels.
Civil works on the dam are near completion, with the electrical and electromechanical job in progress for the switchyard and turbine generator.
Dry testing on the turbine generator is being carried out, while details involving firm and installed capacity, switchyard and protection are being finalised.
