| MURUM, Malaysia
MURUM, Malaysia Dec 14 The trucks that ply the
rough road to the Murum dam under construction in Malaysia's
Sarawak state kick up clouds of dust that obscure the trail and
make driving treacherous. Within an hour, at least 40 of them go
by, laden with freshly cut timber.
The dam on a tributary of the Rajang river is just the start
of a staggeringly ambitious plan to block many of the state's
major waterways by 2020 to tap cheap energy and turn one of
Malaysia's poorest states into a Southeast Asian industrial and
Leveraging energy from the state's numerous rivers and what
it calls a strategic location between China and India, planners
envisage up to 12 dams by 2020.
But that could leave the state with more than 20 times more
energy than it now needs and critics, including opposition
politicians, say that Sarawak simply does not need so many
The plan is also attracting growing opposition from
environmentalists and groups representing indigenous tribes, who
say it is an environmental disaster in the making that will
enrich an elite few.
Towering over the $110 billion plan - known as the Sarawak
Corridor of Renewable Energy, or SCORE - is Chief Minister Abdul
Taib Mahmud, a 76-year-old patriarch who wields sweeping
policymaking powers after three decades in charge of the state.
"He runs Sarawak like a private business for his own
benefit," said Clare Rewcastle-Brown, who runs the whistleblower
website Sarawak Report and is the sister-in-law of former
British Prime Minister Gordon Brown.
"Taib seems determined to empty out whatever forests are
left, turning the state into a drab industrial estate."
Taib says the project will generate high-skilled jobs and
help transform Sarawak, on Malaysia's side of Borneo island,
into the country's richest state.
The state chief, who also serves as the state's resource
planning minister and finance minister, has been under a
Malaysian anti-corruption agency investigation since 2011 but no
charges have been brought. His huge influence in Sarawak makes
him a key ally for the ruling coalition ahead of an election
next year that is expected to the closest in Malaysia's history.
Taib denies allegations of wrongdoing and his office did not
respond to repeated Reuters' interview requests. The chief
minister, whose chauffeured Rolls Royce is a common sight in
Sarawak's capital, Kuching, has said his family's wealth is a
result of its business acumen.
"You can see how much progress Sarawak has made during his
time," Mahathir Mohamad, Malaysia's former long-serving prime
minister, told Reuters in an interview.
"He wants to develop more power there but he has been active
in selling power ... he's bringing a lot of industries there."
BLOW TO SHRINKING FOREST
The wave of dam-building in Sarawak has brought more
scrutiny to links between environmental damage in Malaysia's two
Borneo island states and global financial institutions.
Global Witness, a British-based investigative group, has
criticised HSBC Bank's role in funding companies it
said were logging illegally in Sarawak, saying it was against
the bank's environmental guidelines.
HSBC declined to respond to a request for comment.
Swiss prosecutors opened a criminal investigation into UBS
in August after the bank was accused of laundering
money from illegal logging in Sabah, another Malaysian state
that borders Sarawak. UBS has said it is cooperating with the
At the heart of the plan for Sarawak is attracting foreign
companies, through cut-price power and low taxes, to set up
energy-intensive industries such as aluminium smelting and steel
The state says it has secured investments of 29 billion
ringgit from companies from various countries including the
United Arab Emirates, Australia, Hong Kong, Japan and Malaysia.
A total of 334 billion ringgit of investment is expected by
Stressing its environmental credentials, the project's
website shows a picture of an indigenous tribesman against a
verdant background of plants and a waterfall.
That is in stark contrast to environmentalists' fears that
the dams could deliver a final blow to Sarawak's forests, which
they estimate have shrunk to 5 percent of land cover. The state
says forest cover is 70 percent, but activists say it uses a
broad definition that includes rapidly expanding palm-oil
When Reuters visited the Murum site in October, dozens of
bedraggled villagers from the Penan tribe had been camped out
for three weeks, blocking access to the dam that will flood
their ancestral land in Sarawak's remote northeastern corner.
"Never mind everything, the tiredness, the rain, the heat,
we must do this," said 36-year-old grandmother of nine, Layu
Kara, between mouthfuls of the sticky sago palm paste and jungle
fern that made up her first meal for the day.
The villagers, among 1,500 people who will be displaced by
the 4 billion ringgit dam, were demanding compensation for their
land. The next major dam in the works, Baram, will displace
20,000 people, say rights groups.
Chinese companies, some of which have been involved in other
controversial hydroelectric projects, are building Murum and are
in a strong position to bid for others. Sinohydro Corp
completed Bakun and another Chinese company, the
Three Gorges Corp, builder of the giant dam of the
same name in China, won the bid to construct the Murum dam.
TOO MUCH ENERGY?
Critics of the plan question the strategy of producing an
amount of energy that is far in excess of current demand,
pointing at problems in finding buyers for power from the
existing Bakun dam, completed in 2011, that flooded an area the
size of Singapore.
State energy company Sarawak Energy Berhad says it
already has buyers for all of Murum's 944 megawatts (MW) of
energy and a "long queue" of potential customers for future
Sarawak Energy, which is awarding many of the project's
contracts, says it also plans to sell energy to peninsula
Malaysia and Brunei, as well as to Sabah and Kalimantan, in the
Indonesian part of Borneo.
But it lacks those grid connections, and a planned undersea
cable to the energy-hungry peninsular was abandoned in 2010.
The Bakun dam is capable of producing 2,400 MW, well above
the state's current needs of about 1,000 MW. The project was
labelled a "monument to corruption" by the Transparency
"Sarawak doesn't need 12 dams. Bakun alone is enough. We're
not supplying power to the peninsular, to Brunei or to
Kalimantan," said Baru Bian, an opposition state assembly
In a blow to Taib's plans, Bakun lost what would have been
its biggest customer in March when Australian mining giant Rio
Tinto pulled put of a plan to build a $2 billion
aluminium smelter, blaming a disagreement over pricing.
Sarawak Energy says the 1,500 villagers displaced by the
Murum dam will be suitably resettled and given land they can
cultivate. It hasn't reached a deal on compensation.
The Penan villagers in the Murum blockade were prepared to
wait, within sight of the forests that have been crucial for
their food and income.
"We've never had money in the bank, now we're losing the
rivers, the trees and our livelihoods," says 60-year old village
elder Madai Solo.
($ = 3.046 ringgit)
(Additional reporting by Stuart Grudgings; Editing by Stuart
Grudgings and Robert Birsel)