Malaysia Signs $5.5bn Bakun Dam Pact

After two delays, Bakun Hydro-Electric Corp Bhd signed contracts to design and build the dam with Zurich-based ABB Asea Brown Boveri AG and Brazil's Companhia Braseileira de Projectos e Obras (CBPO).

Environmentalists have criticised the scale of the 2,400 megawatt project, which will clear 69,000 hectares (170,000 acres) of forest, flood an area the size of Singapore and force 9,400 tribal residents to move.

The latest delay in sealing the pact, which was to have been signed on Monday, was followed by rumours that the project manager for the dam, Ekran Bhd executive chairman Ting Pek Khiing, had fallen ill.

 

At a news conference following the pact signing, Mahathir said Ting had suffered a mild stroke. The Ekran chief appeared at the ceremony, walking on his own steam. He told reporters he was feeling very well.

Fears about the billionaire's health had roiled the share prices of Ekran and other Ting-controlled companies on Monday. News on Wednesday that the signing was set drove Ekran's stock up 40 cents to 11.50 ringgit by the close.

Ting is undoubtedly the main driving force behind the Bakun dam project, said Christopher Gee, power analyst at ING Barings Securities in Kuala Lumpur.

The news definitely makes Ekran an attractive stock after recent sell-downs, he added.

Work is expected to start in early 1997.

It should be completed in five years, Mahathir said at the signing on Wednesday.

Bakun Hydro-Electric has already signed a pact with national utility firm Tenaga Nasional Bhd, which has agreed to buy 70 percent of the electricity generated by the dam.

The initial public offering of Bakun Hydro-Electric is expected early next year with at least two billion shares at 1.80 ringgit ($0.72) each on offer.

The issue is slated to be among the biggest ever on the Kuala Lumpur Stock Exchange.

Bakun Hydro-Electric's major shareholders are Ekran, the Sarawak state government and Tenaga. Ekran said on Wednesday it will retain control of the project with a 32 per cent stake.