CEPA abuses power project: House member<\/p>\n
JAKARTA (JP): A legislator accused yesterday the developer of
\nthe Tanjung Jati power plant, PT Consolidated Electric Power Asia
\n(CEPA) Indonesia, of using the unfinished project to improve its
\nportfolio and enable it to sell its shares.<\/p>\n
House of Representatives member Iskandar Mandji, in a hearing
\nwith the president of state electricity firm PT Perusahaan
\nListrik Negara (PLN), Djiteng Marsoedi, said he suspected CEPA
\nhad used the Tanjung Jati project only to improve its
\nperformance.<\/p>\n
"If this is true, it is similar to what Bre-X has done in the
\nBusang case," he said.<\/p>\n
Bre-X is said to have overestimated gold deposits in East
\nKalimantan's Busang mines for capital gain.<\/p>\n
Iskandar said CEPA had sold 80 percent of its shares to
\nSouthern Electric International Holdings, a subsidiary of
\nAtlanta-based Southern Company. The shares were said to be worth
\nUS$2 million.<\/p>\n
Iskandar said PLN should make sure the takeover by the U.S.
\nfirm did not delay the construction of the Tanjung Jati plant and
\ndisturb power between Java and Bali.<\/p>\n
Iskandar also questioned a letter sent by the Minister of
\nMines and Energy requesting CEPA Indonesia cut the price of
\nTanjung Jati B's power supply to PLN to at least the same level
\nas Tanjung Jati A.<\/p>\n
In a power purchase agreement for Tanjung Jati B, PLN and CEPA
\nagreed on an electricity price of 6.45 U.S. cents a kilowatt hour
\n(kWh)<\/p>\n
Tanjung Jati A, which is to be built by a Bakrie Group-led
\nconsortium, had said it would sell electricity to PLN at 5.74
\ncents a kWh.<\/p>\n
CEPA started building the 1,300 MW Tanjung Jati B power plant
\nin Jepara, Central Java, last November.<\/p>\n
The power project, worth US$1.77 billion, had previously been
\nstalled because of disputes about the site.<\/p>\n
But the government finally decided to allow private company to
\ncontinue construction, with some amendments to its agreement with
\nPLN.<\/p>\n
In the power purchase agreement, signed by PLN and CEPA in
\nSeptember 1994, the price was initially set at 7.39 U.S. cents.
\nBut after PLN proposed the government cancel the contract with
\nCEPA, the private company was willing to reduce the price to 6.45
\ncents.<\/p>\n
PLN proposed in July the government cancel CEPA's handling of
\nthe Tanjung Jati-B project because the private company failed to
\nbegin construction as scheduled. But the government decided to
\nallow CEPA to continue the project provided it renegotiated its
\ncontract with PLN. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cepa-abuses-power-project-house-member-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
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