Report: Malaysia's Sime to own 2,400-MW Bakun

The Malaysian government has agreed in principle to let conglomerate Sime Darby Bhd take ownership of the 2,400-MW Bakun hydroelectric project on the island of Borneo, the Edge weekly reported.

Sime leads the consortium building the dam, one of Asia's largest hydro projects outside China, and has suffered problems such as construction falling behind schedule and hefty cost overruns.

The government has also given the nod for a 9 billion ringgit (US$2.47 billion) undersea cable project, with Sime leading the consortium undertaking the project, the paper said, quoting unnamed sources. (HNN 11/29/06)

Although Bakun Dam is 75 percent complete and is to be finished in four years, its owner, the Malaysian government, has yet to find a major buyer for its power. Among the uses considered were a possible aluminum smelter in Sarawak, one of Malaysia's least developed states, and the use of submarine cables to carry the power from the island to the country's more industrialized Asian peninsula.

Edge said the foreign partner for the cable project was likely to be Swiss power and automation firm ABB, which was involved with the Bakun project in the mid-1990s, but whose role was shelved during the Asian financial crisis of 1997-1998.

Companies that could play a part in the cable project include engineer and property developer Malaysian Resources Corp. Bhd, power plant operator Eden Enterprises (Malaysia) Bhd, and Realmild Sdn Bhd, the investment arm of UMNO, the key party in Malaysia's ruling coalition, the paper said.

Dominant power supplier Tenaga Nasional Bhd also could play a role as the sole customer for the power, Edge quoted industry sources saying. Firms reported to have expressed interest in setting up a smelter in Sarawak include Rio Tinto, Alcoa, BHP Billiton, and China's State Grid Corp.

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