SEB says anticipated RM530m additional cost for Murum dam

KUCHING, May 20 — Sarawak Energy Berhad (SEB) said today that it was prepared from the very beginning for the additional cost of RM530 million for the Murum hydroelectric project that was highlighted in the Auditor-General’s (A-G) report this week.

Its media relations manager Ahadiah Zamhari explained that it is normal in any hydropower development to incur additional costs that cannot be accurately priced at the beginning of construction.

“This additional cost is treated as provisional cost, with the final cost being determined by the physical conditions actually encountered at the project site,” she said.

“The Murum project was completed in a cost-effective manner and now provides electricity to people and businesses in Sarawak at a globally competitive price, which can only be achieved through hydropower,” she added when responding to the First Series of the Auditor-General’s Report 2015 that was tabled to Parliament on Wednesday.

According to the report, the project cost RM2.98 billion in total, or RM530 million more than the original price.

Ahadiah said the introduction of efficient power from Murum was an important factor behind the state government’s decision to reduce electricity tariffs in Sarawak last year, which is now the lowest in Malaysia and among the lowest in Asean.

She said SEB welcomes the Auditor-General’s endorsement of its management of the Murum HEP.

“The audit report confirms that the Murum HEP was well executed, that all of the power from the project has been sold to Sarawak Corridor of Renewable Energy (SCORE) investors, and that there has been very significant investment in the resettlement of directly affected people,” Ahadiah said.

In the report, the National Audit Department said while it was satisfied with SEB’s management of the project, there were weaknesses that must be addressed.

SEB is a wholly-owned subsidiary of the State Financial Secretary Incorporated (SFS Inc.)

The Murum dam has a reservoir with a surface area of 245-sq km and a catchment area of 2,750-sq km.

The project is located along the Murum River in the Belaga district, which is about 200km from the Bintulu town and 70km upstream of the Bakun hydroelectric dam.