"We are withdrawing our proposal to take up an equity interest in the project but will continue in our role as a contractor to complete the construction of the dam," Sime Darby Chief Executive Ahmad Zubir Murshid said June 25.
Sime Darby is the world's largest listed palm oil company, with interests in autos, heavy equipment, property, and utilities. The company said it decided investing in the hydro and cable projects did not fit with its business strategy.
It announced in November 2007 that it received approval from the government to buy a 60 percent stake in the Bakun project developer, Sarawak Hidro Sdn Bhd, and that it planned to begin stake acquisition talks. (HNN 12/19/07) Sime Darby also announced it received government approval to take a 60 percent stake in a firm being set up to lay the multi-billion-ringgit undersea cable that would link Bakun to mainland Malaysia.
"The government accepts Sime Darby's decision to withdraw from the equity participation," Second Finance Minister Nor Mohamed Yakcop said in a separate statement.
Nevertheless, Nor Mohamed said the government would take alternative steps to proceed with the plan to transmit electricity from Bakun to peninsular Malaysia as it wants to ensure the stability of power supply in the country.
In published reports, Nor Mohamed said Malaysia utility Tenaga Nasional was welcome to take up the undersea cable project if it is interested. Tenaga said in December it hoped to win a contract for operation and maintenance of the Bakun project upon its completion in 2010.