Bakun the solution to more than electricity woes
fter the recent increase in
the price of sugar, electric-
ity and petrol at the pump
seem likely to get more
expensive. As expected,
the critics are having a
ield daylambasting the government
br previous policies that had led to
vlalaysia's economy becoming heav-
lysubsidised.
But can anyone blame the govern-
nent for raising the prices of essentials
row? The increases are unavoidable,
:onsidering that commodity prices
rave been on the rise since the first
iigns of a US recovery emerged in
:arlyZOOS.
The price of spotthermal coal a - stalled and commissioned over the have afewmore months left ontheir a steady rate of 2o sen per unit, near source of income as an exporter o
(ey component of the generation of
:lectricity has risen to more than
-
Js$loo a tonne while crude oil, al-
hough off its highs,is still above US$95
r barrel.
When Malaysia implemented its
ow-wage, heavy-subsidy policies years
rgo, the price of coal was hovering
rt US$2o a tonne and it remained
-
rt that level for more than zo years.
lrude oil hardlywent above US$3o a
rarrel.The dynamics have changed
lutwe have not.
In a nutshell,couldwe have avoid-
:d falling into the high-commodity,
righ-in{Iation trap? Yes,we could have
- and we still can - provided there
s politicalwill.
Take electricrty. Everyone knows
rates increase, the profits generated acquire and maintain submarines. In fact, the cost could be lower
by the aluminium smelters will be Some RM56o million is also being when more power is transmittec
scrutinised - fust as the profits of forked out everyyear for the National from Sarawak,which has the capac.
the independent power producers Service (PKI.N) camps where "leak- ityto produce as much as 2o,ooomvr
(IPPs) are now. age" is huge. from up to 11 dams that can be built
The opposition is asking the gov- The amount for PKLN will keep there.
ernmentrvia Tenaga Nasional, to re- increasing and there is nothing to Power from Bakun could solvt
that Malaysia is fortunate to be en- negotiate the power-purchase agree- gauge the effectiveness of the three- more than a few issues for the gov
dowed with natural resources that ments (PPA) with the IPPs with a view month programme to nurture na- ernment. For one, it wouldnlt have t<
could generate sufficient renewable to reduce electricity rates. tional integration. To say we cannot worry about electricity tariff hikes
energy to power the whole nation. But to be fair, the generous rates afford the undersea cable is rather The subsidy to keep electricity rater
Just across the sea in the deep iun- were only accorded to the first-gen- dubious, especially when it is com- lowwould decrease over time as power
gles of Sarawak, the fi.rst turbine at eration and some second-generation merciallyviable. from Sarawak replaces gas and coal
the Bakun Hydroelectric Dam will IPPS, whose concessions are near- Offer Tenaga 20 sen a unit in the powered plants,with the savings chan
start commercial operations in two ing their tail end. why renegotiate peninsula and see if it bites.renaga nelled elsewhere, such as towardr
months. The turbine can generate now? Wouldnit tenaga be in a better would be hard-pressed not to consider cheaper petrol.
up to 3ooMw. Seven more will be in- position to do so when the IPPs only the long-term supply of electricity at As for Sarawak, it could have i
next 18 months. concessions? the peninsula's population load cen- electricity because the cable woulc
when fully commissioned, Bakun Coming back to Bakun, the elec- tre. Previously, the rate being bandied provide connectivity to the entirt
will have a firm capacity of 1,8oowrw tricity from the dam was original- about was about 18 sen,but the deal region.The state could also get rev
andthe potentaltogenerate as much ly planned to cater for growing de- did not happen, presumably because enue from the levy on water used t<
2,4OOMW. mand in peninsular Malaysia.The dam, itwas uneconomical. generate electrity while many jobr
What's reallyridiculous is that the which cost the federal government At 20 sen or slightlymore,the un- wouldbe created.
power is likelyto be sold to Sarawak some RM7.4 billion,was built with dersea cable is viable. At that rate, Currently the cheap power that
Energy at a paltry 5.25 sen per unit! loans from the Employees Provident Bakun could easily generate RM2.5 Sarawak Energy gets is going to bt
That is the price that is being nego- Fund (Enr), among others. billion a year.Assuming RM1 billion consumed mainly by aluminiurr
tiated now. But power from Bakun will not be goes to Bakun,the companythat un- smelters. elthough these will pro
It is a giveaway! transmitted to the peninsula because dertakes the transmission is leftwith vide employment and bring som(
Sarawak, in turn, is set to sell the there is no politicalwill to construct another RMl.s billion,which should development to Sarawak, the benefitr
electricity to energy-intensive indus- the rnr.rch-talked-about undersea cable, be sufficient to finance a RMlo bil- will mainly accrue to their sharehold
tries such as aluminium smelters that which could cost up to RMlobillion. lioniob. ers,who are few in number and wel
are setting up there because such rates To say that the cost is too high is If well managed under a proiect de- connected.
are not available anywhere else in this laughable.We spend much more on livery partner (PDP) prograrnme, the why should onlya fewgain fron
part of the world.the industries walk defence proiects; for instance, RM8 cost of the undersea cable could be well an asset that is essential forthe long
awaywith heftyprofits. billion to build armoured person- contained, after the excesses dished term supply of cheap electricity t<
In the future, when electricity nel carriers and several billion to out to rent-seekers are stripped out. the nation?