The State Government of Sarawak, through Sarawak Energy Bhd (SEB) was purportedly looking to buy power generated by the dam called Bakun for 6.00 sen/kWh, while the Federal Government of Malaysia was looking at selling for 7.00 sen/kWh.
Actually, at one stage the State Government of Sarawak had even offered to BUY the whole dam from the Federal Government of Malaysia for RM6.00 billion, although it would not have been likely for the Federal Government of Malaysia to sell it for less than RM7.30 billion, to cover the costs of building the dam called Bakun in the first place.
As we celebrate Gawai Dayak 2011, it is now official that we won’t be buying the dam called Bakun from the Federal Government of Malaysia for RM6.00 billion or RM7.3 billion. We’re not buying the dam. Period.
The only thing SEB is buying is the power generated from the dam called Bakun, at the fair price of 6.25 sen/kWh.
Judging from the activities that have taken place since the signing of the PPA or power purchase agreement in KL on June 1st, which by the way was a public holiday in Sarawak, investors are not too disappointed with the 6.25 sen/kWh deal.
The day after the PPA-signing ceremony in KL, SEB signed deals with four companies keen to set up shop in SCORE’s Samalaju, to take advantage of the attractively-priced electricity to power their energy intensive activities.
Of course, the investors concerned will be buying power for more than 6.25 sen/kWh, but at least with the signing of the PPA, Sarawak and all the investors in SCORE will have a firm figure to work around…instead of just guess work over the tariff these past few years.
And by the way, the power is supposedly still considerably cheaper than anywhere else in the region.
Looks like a win-win-win situation to me, so far.
How BERNAMA reported the power deal:
Power purchase deal backbone to SCORE
Posted on June 3, 2011, Friday
PUTRAJAYA: Prime Minister Datuk Seri Najib Tun Razak said the power purchase agreement signed between Sarawak Hidro Sdn Bhd and Sesco Bhd yesterday for electricity generated from the Bakun hydroelectric project, will serve as the pillar in charting the success of the Sarawak Corridor of Renewable Energy (SCORE).
He said the SCORE project was a giant transformation plan for Sarawak and a catalyst for rural development and by exploiting the power resource from central Sarawak, it would prompt industrial development in the state.
“I am happy to disclose that the tariff rate of 6.25 sen per kilowatt hour (kWh) fixed for the sale of electricity generated from Bakun, with an annual increase of 1.5 per cent, is reasonable and competitive to attract investors into Malaysia, especially, to SCORE,” he said before the signing of the power purchase agreement between Sarawak Hidro Sdn Bhd and Sesco Bhd here yesterday.
Sarawak Hidro Sdn Bhd is wholly-owned by the Minister of Finance Incorporated and Sesco Bhd is owned by Sarawak Energy Bhd and the Sarawak government.
Najib said the federal government was committed to assist Sarawak achieve sustainable economic development in the future.
The 2,400 megawatt (MW) Bakun dam is expected to start commercial production from its first turbine in August followed by subsequent turbines, at an interval of three months, and the eight and last turbine is expected to be fully operational by 2013.
“The Bakun Dam is 98 per cent complete and, as of end-April, was filled with 202 metres of water,” Najib added.
Also present was Sarawak Chief Minister Pehin Sri Abdul Taib Mahmud.
The Prime Minister said the construction of the Bakun project would clearly benefit the people and the state.
“I am sure all quarters involved in the successful completion of the Bakun project and SCORE, especially the Sarawak government, will seize the opportunity to not only draw foreign investments into Malaysia but also support the objective of the New Economic Model to turn the country into a high-income economy by 2020,” he added.
Meanwhile, Syarikat Hidro is forecast to earn a minimum revenue of RM36 million this year and RM112 million in 2012.
In a statement released at the signing ceremony, the company said a water levy of RM7 million and RM21 million would be paid to the state government this year and in 2012, respectively.
Once the Bakun dam is fully operational and the power generated is able to be received by the Sarawak grid system in 2016, the Bakun power station will generate 17,500 gigawatt hours of new capacity every year, which would be equivalent to 15 per cent of overall capacity in Peninsular Malaysia and three times the hydro electricity power generated in Malaysia. — Bernama
How BERNAMA reported the State’s intention at one time to buy the dam called Bakun:
Sarawak offers RM6bil for Bakun dam
Sunday September 26, 2010
KUCHING: The Sarawak government has offered RM6bil to buy the Bakun hydroelectric project from the Federal government, said Sarawak Chief Minister Tan Sri Abdul Taib Mahmud on Sunday.
“We have made our bid (RM6bil). The bid is flexible in the sense that if the method of payment can be made lighter we can increase a bit more, but there is a limit to what we can pay,” he told reporters after attending an Aidifitri open house at Kem Penrissen Batu 8 here on Sunday.
Taib said the negotiations on the matter (the state buying over the project) were still going on and that a final decision had yet to be reached.
According to him, the Federal government had yet to put a price tag on the project which was estimated to have incurred costs exceeding RM7.3 billion.
The Bakun project, Malaysia’s largest hydroelectric dam, is located on the Balui River in the upper Rejang River basin, some 37km upstream from Belaga.
The hydroelectricity project was first mooted in the early 1980s by the Federal government to diversify the country’s power sources and was first awarded to Ekran Bhd, a company controlled by Tan Sri Ting Pek Khing.
The physical work on the dam started in 1994.
Sarawak Hidro was established to take over the project’s development and management in 2000 after the Asian financial crisis of 1997-98 crippled the project.
At end-2002, a Sime Darby-led consortium won a competitive tender to undertake the civil works for the dam for less than RM1.8 billion.
The Bakun Dam, the second tallest concrete rock-filled dam in the world, is expected to be completed this December.
About 300 MW of hydropower from the first turbine is expected to be generated by the middle of next year. It will have the capacity to generate 2,400 MW of power when all eight turbines are in place by 2012. – Bernama