By Morten Rønning
The Malaysian environmental movement do not dare to put too much into the last month's events. Sahabat Alam Malaysia (Friends of the Earth) says to NorWatch that they do not know more than they have read in the papers.
The Bakun Dam was supposed to be the Malaysian Government's crown example of a successful co-operation between authorities and private companies. For the first time, a hydro power project was given to a private company, Ekran BHD.
Because of forced relocation of people and the destruction of the rain forest, the project has met strong criticism from the national and international environmental movement (see newsletters 4/96, 10/96 and 1/97).
Ekran Bhd, with the powerful Tan Sri Ting Pek at the wheel, has met little else than opposition since they received the contract for the project in January 1994.
In July 1996, the legal system supported the claim of the local population that the project did not follow the national environmental laws, but the decision was appealed by Ekran, which later was upheld.
The financing of the 5.5 billion USD dam failed both nationally and internationally. As a consequence, in April this year the Malaysian authorities had to step in and guarantee the financing of the project.
Trough an emission in May this year (1997), as much as 65% of the shares in Bakun Hydroelectric Company were untouched, which forced Ekran to increase its share of the project.
In October 1996, the company awarded a temporary main contract for the development to a consortium led by the Swiss/Swedish ABB and the Brazilian CPBO, worth more than 30 billion NOKs.
The contract was agreed in the Malaysian currency ringgit; however, this summer Malaysia together with Thailand and Indonesia saw its currency plummet. ABB/CPBO immediately started re-negotiating the value of the contract.
According to Dagens Næringsliv (Norwegian financial paper), there were also other disagreements over the allocation of overexpenditures.
3rd September Ekran informed ABB/CPBO that the contract was cancelled due to the disagreements. At the same time, Ekran had started negotiations with other contractors behind the back of ABB/CPBO.
Temporary put off
20th November, the Malaysian minister of Finance stated that the authorities had taken over the project from Ekran. The project is valuable for the country, and the authorities wanted to prevent that the investments that are done will be lost.
The project is put off indefinitely, but the finance minister denied that this meant a cancelling of the project, according to the newspaper New Strait Times.
The work with the diversion tunnel and the forced relocation of the 10.000 people in the area continues as before. The tunnel is scheduled to be finished in March next year, and then the area will be inhabitable, according to the finance minister.
At the same time, there is no information of when the work on the dam itself will start.
According to ABB's main office in Sweden, the company expects costs of around 700 million due to the loss of the contract.
Nobody is prepared to answer questions related to the loss of contract in Bakun at Kværner Energy in Oslo.
Norwatch Newsletter 18/97