The controversial multi-billion ringgit Tanjung Aru Eco-Development (TAED) project here will proceed soon, a state minister confirmed today.

Infrastructure Development Minister Peter Anthony said that to ensure adequate water supply for the project, it is necessary to build the Papar Dam, which has equally been objected against by the local community and environmental activists.

Anthony said the government acknowledged that the dam's construction had been met with resistance from the public but it was the only way to address Sabah's future water needs.

"When we look at the overall aspects, this dam is necessary because soon the TAED will start operating in Tanjung Aru.

"When it is operational, and coupled with the rise in population of nearby areas such as Beaufort, Putatan, Papar and Kota Kinabalu, adequate water supply is definitely needed," he said during an excellent service awards and farewell to retirees from the Sabah Water Department at a hotel here today.

Anthony said the department needed to plan for sufficient water capacity as the water plant in Papar cannot accommodate the demand.

"When the tide comes in, it is (mostly) salt water and this is a concern for residents there. That is why they are agreeable to the Papar Dam being implemented immediately," he said.

Before the May 9 general election last year, Warisan had campaigned against the TAED project as well as the Kaiduan Dam in Penampang, pledging it would scrap the projects if it came to power.

However, after assuming power, Chief Minister Shafie Apdal said the TAED project might not be scrapped as it was too important for the state, adding that the state government would review the development plans.

Since then, there has been no announcement of its final decision, which Shafie said would only be made after taking the people's views and the interests of the government and investors into account.

The government subsequently announced the cancellation of the Kaiduan Dam but said construction of the Papar Dam, which drew criticism from grassroots organisations as well as the opposition, would go on.

The critics contend that the Papar Dam was only a rehash of the rejected plan as it would still be built on the same river although on a different location.

Anthony said the Papar Dam would have a dual function as it would also be able to generate electricity.

"It must be able to produce 100kVa of power, which will be enough for the needs stretching from Papar to Kota Kinabalu," he said, adding the road linkages in these areas would also receive upgrades.

"When we finally settle the loans to construct the dam, maybe in six or seven years, the state government will be able to collect at least RM500 million annually and this is good for development in Sabah."

He said the Babagon Dam in Penampang was unable to accommodate future water needs, adding it was not possible to upgrade the dam's existing design.