The multi-billion ringgit Bakun hydroelectric dam project is expected to contribute to Synergy Drive Bhd's revenue stream in the years to come. StarBiz talks to Synergy Drive group chief executive Datuk Seri Ahmad Zubir Murshid on how the project fits into the country's overall business strategy and the relevance of sustainable and cheaper energy sources to the country in future.

KUALA LUMPUR: Synergy Drive Bhd expects its energy and utilities division, especially with the Bakun hydroelectric dam project coming on stream between 2013 and 2015, to boost the company’s earnings.

President and group chief executive Datuk Seri Ahmad Zubir Murshid said the Bakun project would help provide recurrent income for the company’s energy division and balance out the earnings derived from its other four core businesses of plantations, property development, motor vehicles and heavy equipment.

“Bakun fits in very well with our energy strategy.

“The plantation division contributes over 40% to the group’s operating profits in FY07 while the other divisions contribute the rest,” Zubir told StarBiz.

He said the company had a strategy to even out and enlarge its earnings on a global scale.

“Post-listing, we’ll focus on consolidating, especially in the plantations and property development divisions, to create greater efficiencies which the company believes could be over RM300mil per annum from FY2010,” Zubir said.

On the Bakun project, he said the development would involve the building of the dam, due for completion by 2010, then the building of the two underwater transmission cables, which would take another three to five years before both cables would be operational. Each cable is 700km long.

“The first cable is due for completion in 2013 and the second in 2015, each supplying about 800MW,” Zubir said, adding that the transmission points were from the Bakun plant to Tanjung Leman, Johor.

The hydroelectric plant would be able to provide 1,780MW continuously or 2,400MW if operated at full capacity, making Synergy Drive the largest independent power producer in terms of hydroelectric power capability.

“Currently, we are operating two power plants - Port Dickson Power (440MW) and Laem Chabang Power in Thailand (103.5MW),” Zubir said, adding that the company would be more energy efficient in future when it started using power plants to produce palm oil-based biomass to run its 200 estates and 65 mills.

He said one of its estates was now running a pilot project using a palm oil-based biomass plant with the capacity of producing 1MW.

On Bakun and the transmission cable cost, and return on investment, Zubir said: “We just received the letter of intent from the Government about a week ago so I’m not able to tell you the total cost although we’ve done our homework.”

Industry observers said that issues such as environmental impact, maintenance of the undersea cables and the protection of the cables from shocks such as tsunamis, earthquakes and accidental anchor drags need to be addressed.

On the construction of the undersea cables, Zubir said the company was discussing with three companies that had the expertise and financial strength to undertake the project.

On the possibility of more hydroelectric dams in Sarawak, he said: “We have the capability but it's up to the Sarawak government to decide if more hydroelectric dams are required.”

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