SUPP says Bakun dam is worth the price
Dr Sim Kui Hian says the dam with the largest hydroelectric plant in Malaysia is an important component in Sarawak’s autonomy.
KUCHING: The Bakun dam is worth its purchase price of RM8.1 billion, Sarawak United People’s Party (SUPP) leader Dr Sim Kui Hian said today in defending the state government’s decision to acquire the power plant from Putrajaya.
“It’s a very important component in our financial autonomy. I am very surprised by the illogical argument by DAP whose leaders kept saying that it is not worth the price paid,” Sim told reporters today.
“DAP kept on saying that the book value was so low, but the truth is, the asset is so big. The question they should ask is how much a new ‘Bakun dam’ would cost if it was built today,” Sim said at a press conference after the state assembly session here.
He said this after Sarawak Chief Minister Abang Johari Openg told the house that the decision to acquire the dam was a “logical one” that would benefit the state in the long run.
During his winding-up speech, DAP’s Pelawan assemblyman David Wong had questioned the cost, asking whether the government had overpaid for the dam.
However, Sim said there would be instant returns following the purchase.
“Stop misleading people that the company’s net worth is only RM1.65 billion. That’s the book value. How about the assets?” he said.
He said a key issue was what the cost would be to build such a dam today.
“They never tell people that to build another Bakun, it would take at least another five years (to construct),” he said.
Sim said the construction was originally financed by the federal government and therefore the structure was rightfully theirs.
“So it’s wrong to say that Bakun belongs to us because it’s situated in our borders. Who paid the money to build Bakun?”
To make his point, he said the same argument could be applied to a house in Kenyalang Park in Pending state constituency by saying that it belongs to DAP’s Violet Yong as she is the assemblywoman there.
“That’s the type of argument they have. It’s in your area, so it belongs to you.”
The cost of Bakun’s construction was RM7.4 billion.
The state government announced that the purchase price was RM2.5 billion in cash and RM5.6 billion in net debt outstanding as of end-December 2016.
An agreement was reached for the ownership and operation of the dam, which has the country’s largest hydropower electric plant, to be fully returned to Sarawak through the state’s acquisition of shares in Sarawak Hidro Sdn Bhd (SHSB).
The finance ministry will continue to provide an undertaking for the loans related to the dam while the RM2.5 billion cash buy includes the entire equity of SHSB as well as its redeemable shares.
The RM2.5 billion in cash will be paid for by SEB’s internally-generated funds and loan facilities.
The net debt of RM5.6 billion will be repaid purely by cash flows generated through the dam’s facilities over the remaining duration of the loan of 15 years.
The asset life span of the dam is more than the 60 years in terms of the power generation licence period given by the government.
“This indeed makes very good business sense. The Bakun dam is commercially viable. Once the debts are paid, it will become another source of income for the Sarawak government,” Abang Johari had said.
‘Won’t Bakun dam purchase be a burden for Sarawak?’
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