A chief resident engineer of Sarawak Hidro Sdn Bhd (SHSB), the manager of the multi-billion ringgit Bakun hydroelectric dam, has applied for long leave and is not expected to return to work, inside sources revealed.

Tan Chuan Ngan, an engineer seconded from the Sarawak Electricity Supply Corporation (Sesco) Bhd to SHSB at the start of the Bakun project, has left (feeling disgusted with) the top management," the sources told malaysiakini today, adding that he has also returned the company's mobile phone.

"He has a lot of accumulated leave due to him and is not expected to come back to his job."

It is understood that Tan's problems started following the appointment of senior Finance Ministry official Husniarti Tamin as SHSB chairperson and the serious differences of opinion over the way the project was being managed, particularly payment for work done.

Husniarti was previously a board member of national asset management company Pengurusan Danaharta Nasional Bhd.

Confirmed delay

The sources also confirmed newspaper reports that the RM4 billion project with a design capacity of 2,400 megawatts was also very much behind schedule.

None of the consortium partners was prepared to comment on reports of a RM200 million government loan to proceed with the project.

China Hydro (Malaysia) Sdn Bhd has a 30 percent stake in the consortium which was originally led by Sime Engineering Sdn Bhd.

The government, it is learnt, has released over RM400 million to the consortium including mobilisation costs at the start of the project as well as the RM200 million loan.

"In between, some claims were paid out for work done," the sources said.

"Due to legal implications, the government prefers to term the RM200 million payment to contractors as a loan, which may serve to cover the cost over-run the consortium is asking the government to consider."

Price revision

China Hydro's project engineer Yi Qiang, who is responsible for the implementation of the 1B package of the RM1.77 billion civil and engineering works, could not be reached for comment at the site.

The consortium has maintained that the cost over-run was due to unforseen problems at the site, prompting it to ask for an upward revision to RM2.2 billion.

Due to its inability to meet the original completion date of 2007, the consortium has asked for a time extension of up to 18 months to avoid being fined a hefty RM1 million per day of delay.

But the government is only willing to consider a 10-month period, which means that the consortium would still be liable to pay the fine for further delay.

A Kuala Lumpur-based financial analyst familiar with the project told malaysiakini that the government has no problem in financing the project through bonds against the projected sale of electricity from Bakun.

The only problem, said the unnamed analyst, is the uncertainty as to the actual completion of the project.