Malaysia’s Finance Ministry has announced that five civil engineering companies have been invited to tender to build a 90m high, US$10-16M coffer dam across the Batang Balui river in Sarawak, Malaysia, to allow the Bakun dam to go ahead.

The Ministry did not name the companies but industry sources say they are IJM Corporation and Loh & Loh, both based in western Malaysia; Hock Seng Lee and Cahaya Mata Sarawak (CMS), both Sarawakian ventures; and a Malaysian subsidiary of South Korea’s Dong Ah Construction.

Since Dong Ah is now in receivership, the invitations effectively limit work to Malaysian companies. Insiders expect CMS to be awarded the contract.

The Ministry’s move follows Malaysian cabinet approval to proceed with the project. In its latest incarnation the main dam and power house will be built as originally planned, but the 670km undersea HVDC cable to west Malaysia will be scrapped. This will cut current cost estimates by about one-third to around US$2.4B for the entire scheme. As Bakun’s power will now be sold exclusively in the east Malaysian states of Sarawak and Sabah and perhaps Brunei and Indonesia’s Kalimantan, turbines will be installed and commissioned as required over several years.

But the project is not as unrealistic as it seems. Although Sabah and Sarawak currently have an astonishing nominal 70% reserve margin, power demand is growing by at least 5% per year. This is expected to require an additional installed cap-acity by 2007, a date that could well be brought forward by other development plans for the area. For example, Malaysian Prime Minister Mahathir Mohamad recently said an information technology hub would be established in Sarawak while Bakun itself will require the development of a new airport.

Bakun will also allow both states to retire their expensive and ageing diesel power plant, thereby bringing their power supply firmly under government control. Kuala Lumpur, through state utility Tenaga Nasional (TNB), already controls supplies elsewhere.

The Finance Ministry owns the project developer Sarawak Hidro after it bought out the original developers, Ekran, in 1998. It will oversee and finance the project. Once coffer dam construction begins, it also expects to invite bids for the main civil works and mechanical and electrical contracts. This is expected to take about one year.

The resettlement of about 10,000 indigenous people has been accomplished and river diversion works are nearly complete. As the coffer dam progresses work on the main dam can begin. This is expected to be 205m high with a 740m long crest.

Of the total US$2.4B budget, about US$300M has been spent so far on diversion works, resettlement and compensation to the original developer. The main civil, mechanical and electrical contracts are expected to cost a further US$1.6B, leaving the balance of around US$500M for the main substation and overhead transmission lines.