Taib family's CMS to benefit from new dam project

Who will foot the bill for the resettlement of those affected by the new RM3 billion Murum dam?

''Is it Sarawak Energy (Berhad) or will it be passed on directly to the state government and hence the taxpayer,'' asked one Sarawak-based activist, who declined to be identified.

In the case of Bakun, the mega-dam in central Sarawak which is still under construction, compensation to indigenous people and resettlement cost the Sarawak and federal governments over RM876 million.

''But there are still Bakun residents who have not received compensation even though they left the Bakun area 10 years ago,'' noted the auditor-general in his 2007 annual report.

Sarawak Energy Berhad (SEB), which is 65 percent owned by the Sarawak state government, will fund the Murum dam. It was reported in June that SEB would issue bonds to finance the project.

SEB has been in negotiations with infrastructure firm Cahaya Mata Sarawak (CMS) and the multinational Rio Tinto Alcan to supply 900-1,200MW of electricity to power a huge smelter. A power purchase agreement was supposed to have been signed by Aug 31, and there has been no news since.

Both CMS and Rio Tinto are in a consortium, the Sarawak Aluminium Company (Salco), to build the US$2 billion aluminium smelter with an initial annual capacity of 550,000 tonnes, which could later be expanded to 1.5 million tonnes. The smelter is located in the Similajau area of Sarawak, not far from the proposed Murum and Bakun dams.

Rio Tinto Alcan, which has a 60 percent stake in Salco, owns bauxite mines, alumina refineries and aluminium smelters around the world.

CMS, a listed infrastructure firm controlled by Sarawak Chief Minister Taib Mahmud's family, is a major producer and supplier of steel, cement and other construction materials in the state. Taib (photo, far left) has been chief minister of Sarawak for more than 25 years.

According to the firm's 2007 annual report, the substantial shareholders of CMS are the chief minister's daughters, Jamilah Hamidah and Hanifah Hajar, son-in-law Syed Ahmad Alwee Alsree, and family concern Majaharta Sdn Bhd, each with a 14 percent stake.

Taib's wife Lejla has an 11 percent stake while sons, Sulaiman Abdul Rahman and Mahmud Abu Bekir, own 9 percent each.

Taib's brother-in-law, Aziz Husain, on the other hand, happens to be managing director of SEB.

Why The Need Of So Many Dams?

Sarawak plans to lure such energy-hungry industries by providing an abundant supply of cheap electricity within the 320-km long Sarawak Corridor of Renewable Energy (Score), an economic development region, managed by the state, where abundant power would be supplied to energy-intensive private industries.

Score, launched by Prime Minister Abdullah Ahmad Badawi in February 2008, aims to tap into the state's 20,000MW hydropower potential by building even more dams in the longer term.

Sarawak's current installed capacity is just 980MW, adequate for its current needs of about 750MW, but it aims to expand its hydro capacity to 7,000MW or more over the next decade by building a string of 12 dams along the various rivers in the state.

While smelters could create jobs and contribute to GDP, the funding for the dams required to supply cheap electricity will have to be raised by the state or borrowed from public pension funds (as in the case of Bakun).

And while indigenous communities are displaced, many foreign workers will have to be brought in for the construction of the dams. And then there are the
environmental costs.

''Will that justify building Murum at a probable estimated cost of RM3 billion, with likely cost overruns to RM5 billion?'' asked a Sarawak-based academic, who declined to be identified.

In the case of Bakun, ''cost over-runs of RM708 million were approved by the Finance Ministry even though the contract was for a fixed lump sum with all risks to be borne by the main contractor (a consortium of private Malaysian companies and China interests),'' chided the auditor-general in his report.

Sarawak Hidro, the Bakun dam developer, has outstanding borrowings (as at end-2007) of RM3.4 billion. It had received RM3 billion from a state-managed workers' pension fund, the Employees' Provident Fund (EPF) in 2007, and RM400 million from a state-owned pension trust fund in 2002.

The EPF loan is guaranteed by the federal government. The federal government had also allocated RM1.8 billion for the project between 1997 and 2004. Sarawak Hidro has already spent RM4 billion on the project.

Natives: Better Bomb Us Now

So is Murum really necessary?

''For energy needs in Sarawak, we don't need the Murum, because Bakun is more than enough to supply the state's needs,'' says Raymond Abin of the Borneo Resource Institute (Brimas). ''Of course, (much of) this will not go to the really rural areas but will supply industry's needs."

"The impression among many sceptics is that these are all self-serving projects," said another senior academic in a Sarawak-based university, carefully weighing his words while requesting anonymity.

All these funds are not helping the most affected communities like the Penan.

''This is not development for the Penan. This is not assisting the Penan,'' says Weng, a Penan whose home will be submerged. ''This is killing the Penan. As our old headman said before, better bomb us now than 'kill' us slowly!''