Wednesday, August 08, 2007
The Jakarta Post, Jakarta
After three months of delays due to a lack of government guarantees for the investors, state-owned electricity company PLN finally signed Tuesday contracts with three Chinese consortiums for the construction of three coal-fired power plants.
The signing of the contracts followed Finance Minister Sri Mulyani Indrawati's assurance Monday that the government would fully guarantee the financing of PLN's crash program to provide additional 10,000 megawatts (MW) of power by the end of 2009.
Speaking to reporters after the signing ceremony, Energy and Mineral Resources Minister Purnomo Yusgiantoro said the signing of the contracts meant that 60 percent of the contracts for the the construction of power plants to be built under the crash program had been concluded.
He said that the remaing 40 percent of contracts, mostly for the construction of power plants outside Java, would be signed in September this year.
Under Tuesday's contracts, a Chinese consortium of Shanghai Electric Corp Ltd and Dalle Energy will construct a 945 MW coal-fired power plant in Teluk Naga, Banten, at a cost of US$547.4 million in foreign exchange and Rp 1.89 trillion in local currency (about $207.6 million).
A consortium of Dongfang Electric Corp and Dalle Energy will build a 630 MW coal-fired power plant in Pacitan, East Java at $344.9 million and Rp 1.23 trillion, while a consortium of Shanghai Electric Corp Ltd and Maxima Infrastructure will establish a 1,050 MW coal-fired power plant in Pelabuhan Ratu at $566.9 million and Rp 2,205 trillion, West Java.
In March, PLN signed contracts for five coal-fired power plants, all in Java, with a total capacity of 3,300 MW.
Purnomo said the operation of the new coal-fired power plants would significantly reduce the government subsidy for electricity utilization, reduce dependence on oil-based-fuel and increase the country's electrification rate, which now stood at 56 percent.
"We still have approximately 30 months to finish the crash program. If we can complete it by the end of 2009 it would be an extraordinary effort," he said.
"With 10,000 MW from the crash program, plus 10,000 MW more from independent power producers and also some more from private companies, I believe that in five or six years we can double what we did during the past 62 years of our independence."
Currently, PLN has a total installed capacity of 24,417 MW, or 85.5 percent of the total national power generating capacity. The remainder is provided by independent power producers (3,450 MW), and privately owned companies operating power plants for their own industrial activities (746 MW).
Beside the contracts with the three consortiums, PLN also signed on Tuesday a letter of intent with China National Machinery Industry Corporation (Sinomach), for the construction of Tanjung Awar Awar plant and several long-term contracts with coal miners to supply a total of 5.5 million tons of low-rank coal per year.
A consortium of PT Kasih Industri Indonesia and PT Senamas Energindo Mulia will supply 1.4 million tons of coal per year for Teluk Naga plant, a while consortium of PT Arutmin Indonesia and PT Darma Henwa will provide the plant with 858,000 tons of coal per year.
A consortium of PT Arutmin Indonesia and PT Darma Henwa will provide the Pacitan plant with 950,000 tons per year while PT Titan Mining Energy and PT Bara Mutiara Prima will provide Pelabuhan Ratu plant with 1.4 million and 858,000 tons of coal per year, respectively .
"The government is concerned about the long chain of supply of coal from mining sites to plants. Don't let it happen that when construction is finished, the coal supply is not yet ready," Yusgiantoro told the investors.(02)