Construction work on the controversial multi-billion-ringgit Bakun Hydro-Dam Project has failed to make any significant progress in the last two to three months.

According to sources, the project is at least nine months behind schedule. "The reason for the delay is somewhat complex but can be attributed basically to organisational hiccups,'' the source said.

In September 2002, a 70:30 joint venture - Malaysia-China Hydro Joint Venture - was awarded the RM1.8 billion main civil works involving the design, procurement and construction of the power generation structures comprising the main dam, spillway, power intake, power tunnels, water release outlet, powerhouse, hydraulic gates, stoplots, cranes and associated electrical and mechanical equipment for the project.

The project contract period is about 60 months, about a third of which has already passed with completed work to date at around 11 percent.

The scheduled date for completion is September 2007, and there is a hefty penalty for delay which seems inevitable unless the Sime Engineering Sdn Bhd (SESB)-led seven-member consortium pushes into high gear.

It remains to be seen whether there will be any significant progress within the next few months before the onset of the wet season which usually starts in November and lasts till March the following year.

Divided into packages

Sources told malaysiakini the project has been divided into several packages, most of which have been given out to sub-contractors, who are also joint-venture partners, on agreed prices that allow the consortium a certain percentage as profit.

"One or two of the packages have yet to be given out. The tendering process is taking a little too long," they said.

In one case, Sino Hydro (formerly known as China Water Resources and Hydropower Engineering Corporation) which has 30 per cent equity in the JV has been asked to tender out part of a package awarded to it to another JV partner WCT Engineering Berhad.

"Sino Hydro probably doesn't mind the pricing and letting part of its sub-contract work to a fellow JV partner because they are looking for a foothold in construction work in this part of the world.

"But it is causing some inordinate delays," said the sources.

As an indication of the progress since the Sime Engineering-led consortium commenced civil works on October 8, 2003, they have paid claims of "less than RM100 million".

This is in addition to the RM200 million they received as advance payment from the employer Sarawak Hidro Sdn Bhd, a 100 percent Ministry of Finance Inc-owned company.

In May this year, Sime Engineering managing director Jafar Carrim told journalists visiting Bakun that 11 percent of the work had been completed and that they were making good progress to try and bring the project on schedule, possibly by year-end.

Claims of RM180 million had also been put in for work done, he said.

However, sources said "less than RM100 million" of the claims had been paid out to the consortium, indicating perhaps the amount of work actually completed.

Malaysiakini understands that the consortium has received a request from Sarawak Hidro to inform it as to the amount of work already completed to date.

"They are still waiting for a reply from the main contractors," the sources added.

Organisational factors

Several engineers involved directly and indirectly with the project said organisational factors played a key role in the delays, and the parties involved must address this issue as quickly as possible.

"Otherwise, it doesn't look like the project could complete by September 2007 - which is only three years away. At any rate, contractually, they must hand over the area for impounding, that is flooding the area, by January 2007, a process that is expected to take at least nine months or more, depending on rainfall,'' they added.

The consortium is said to be aware that delay may be inevitable and it may have little choice but to pay penalty, unless this can be waived with good reasons.

The Sarawak state government has been offered 10 percent in Sarawak Hidro, which will be an independent power producer (IPP) generating power that will sold to the successor company of Sarawak Electricity Supply Corporation (Sesco).

Economic planners worry about where much of the 2400MW electricity will go, if by the time the project is completed a proposed smelter plant has still not taken off in Bintulu.

The delay in the completion of Bakun HEP might be a blessing as it would give the authorities, both state and federa, more time to look for investors in energy-intensive industries in Sarawak.

Otherwise, Bakun when completed will operate at half capacity or 1200MW, part of which can go to Sabah and the rest locally within Sarawak.