Malaysia's GIIG Capital, controlled by tycoon Syed Mokhtar Albukhary, said yesterday that plans to take control of the huge Bakun hydroelectric dam project were on track despite the government's announcement it has not decided whether to privatise the project.

GIIG director Shahrir Shariff said in a statement its proposed acquisition of a 60 percent stake in Sarawak Hidro, the operator of the 2,400 megawatt Bakun scheme in Sarawak, was proceeding as planned.

"We are committing equity investment of RM945 million ringgit (US$248.68 million), representing 60 percent funding for the Bakun project," he said.

GIIG paid 10 percent of the investment amount to the government upon signing an agreement on August 30 and has satisfied all pre-conditions, as well as making a second payment of RM85.05 million on October 13, he said.

As a new equity investor, Shahrir said GIIG was required to accept the prior works on the Bakun site as well as the contractors appointed by the finance ministry, but has requested construction be completed on schedule.

GIIG, which is jointly owned by Syed Mokhtar and Dubai-based Mohamed Ali Alabbar, wants to gain control of the project to ensure power supply for the two-billion-dollar smelter it wants to develop by 2007.

"As GIIG will also be operating an aluminum smelter in Sarawak which is wholly dependent on Bakun for power, it is also imperative that transmission facilities should be ready prior to its commercial operation," he added.

The government took over the controversial Bakun project and revived it in 2001 after it was shelved during the 1997-1998 Asian financial crisis when the main operator fell into debt.

New Prime Minister Abdullah Ahmad Badawi on Tuesday said the government would proceed with the project but had not decided whether to privatise it.

New proposals?

The Edge weekly newspaper has reported that the August agreement had lapsed because GIIG failed to fulfill certain conditions by an October 15 deadline and the government was having "second thoughts" about selling Sarawak Hidro.

It said it learned other companies had submitted new project proposals to the government.

These included a joint-venture between Malaysian Resources Corp. and Sweden's Asea Brown Boveri.

The dam, which involves flooding an area the size of Singapore, has attracted fierce criticism because of its likely effect on the environment and some 10,000 locals who have already been moved out of their homes. Environmentalists say the dam's capacity far exceeds future power needs in Sarawak. - AFP