KUALA LUMPUR: Uncertainties on operations of the Bakun Hydroelectric Dam were lifted yesterday when Sarawak Hidro Sdn Bhd, the owner of the dam, started impounding operations yesterday morning.

The exercise which will effectively flood the area as big as the size of Singapore started yesterday morning with the closure of the diversion tunnel at 10am.

Sarawak Hidro, an entity controlled by Ministry of Finance (MoF), stated in a statement yesterday that the impoundment exercise of the 2,400-Mw Bakun Hydroelectric Dam started yesterday after it received the greenlight from the Sarawak Ministry of Public Utilities.

“The impoundment or filling up of reservoir will take about seven months to reach the minimum operation elevation of 195 metres (above sea level) for running the turbines. Filling of the reservoir to its maximum operation elevation of 228 metres would take about 13 months depending on the rainfall in the catchment area,” Sarawak Hidro stated.

Previously it was reported that Sarawak Hidro was awaiting impoundment order from the state after it had fulfilled all technical requirements. Only after the water has reached a minimum of 195 metres can the eight turbines in the dam be tested.

The state on its part has delayed in giving out the approval as it wants to ensure that all safety aspects with regard to the dam have been complied with and the inconvenience the impoundment will have on the river transportation system along the Balui River is minimised.

With the impoundment exercise under way, negotiations for the sale of the dam are expected to pick up in pace.

Sarawak Energy Bhd, an entity backed by the state government, is in negotiations and has made an offer of RM6.3 billion for the dam. But Sarawak Hidro is seeking a higher price as the cost of building the dam itself is at least RM7.3 billion.

The energy from the dam is to be transmitted to two aluminium smelters. One of it is to be built via a joint venture between Cahya Mata Sarawak Bhd and BHP Billiton, while another is to be built via a joint venture between GIIG Holdings and Aluminium Corp of China Ltd (Chalco). The smelters have a capacity of 330,000 tonnes and 550,000 tonnes, respectively.

This article appeared in The Edge Financial Daily, October 14, 2010.