SARAWAK Chief Minister Abang Johari Openg has defended the state’s decision to buy the controversial Bakun hydroelectric dam despite criticism from the opposition.

He said the dam, bought for RM2.5 billion in cash and with the state government absorbing its RM5.6 billion in net debt outstanding as of end-December 2016, is a major strategic asset “which we must treasure, therefore, own it”.

The Kota Sentosa assemblyman last Wednesday suggested that the state government could have forced Putrajaya to sell the dam more cheaply by not buying the power generated by the dam.

Sarawak Energy Bhd (SEB), the power utility company that is wholly owned by the Sarawak government, is the sole purchaser of Bakun power.

DAP Palawan assemblyman David Wong also asked why the state bought the dam at that price when its book value was RM1.6 billion.

Abang Johari said the government, too, had its own accountants, “we have done our homework and we have done our due diligence”.

He told the assembly today that the Finance Ministry will continue to provide the government guarantee and letter of undertaking for the loans.

“The RM2.5 billion buys the entire equity of Sarawak Hidro Sdn Bhd, as well as the special rights redeemable share.”

The chief minister said the money would come from SEB’s internally generated funds and loan facilities.

The net debt, he said, would be repaid “purely by the cash flows” generated by the Bakun dam over the remaining duration of the 15-year loan as against the asset life span of the dam, which would be more than the 60-year generation licence period given by the government.

That, he added, made “very good business sense”.

Abang Johari said by retaining control of Bakun, the area surrounding it could be opened up for development, including tourism, recreation, aquaculture, as well as conservation. – May 22, 2017.