The Bakun Dam project (reported on in the Spring 1997 Alternatives) has been postponed indefinitely by the Malaysian government. Situated in a fragile tropical forest habitat, and requiring relocation of more than 9000 people, the project had long been criticized as environmentally unsound and socially irresponsible.

More recently, its economic viability had been questioned, especially in the face of difficulties in attracting foreign investors, and uncertainties about its cost. Ultimately, these economic concerns forced the project's cancellation.

The first cracks in the dam project appeared on September 3, 1997, when the Swedish engineering firm ABB was informed that the agreement for it to serve as chief contractor had been cancelled. ABB and Ekran Berhad, the Malaysian company promoting the project, could not agree on who would be responsible for cost overruns. As Ekran searched for a new partner, larger economic factors intervened. The economic crisis in southeast Asia, and especially a growing current account deficit, led Malaysian authorities to announce last October 18 the cancellation or postponement of numerous megaprojects, including the Bakun Dam, together costing more than $20 billion. On November 20, Ekran ended its involvement and the Malaysian government officially assumed responsibility for the Bakun Dam.

Despite the decision to suspend the project, Malaysian Finance Minister Anwar Ibrahim says some construction will be completed: "The river diversion tunnel is already in progress, so we cannot stop halfway." Resettlement is also continuing, apparently in case the dam is someday revived. Thus even on the shelf, the Bakun continues to disrupt the lives and livelihoods of people in the area.