CEPA to continue its power project in Central Java<\/p>\n
JAKARTA (JP): The government has decided to allow PT
\nConsolidated Electric Power Asia (CEPA) Indonesia to continue the
\nconstruction of the 1,300 megawatt (MW) Tanjung Jati B power
\nplant in Jepara, Central Java, a minister said yesterday.<\/p>\n
\"The issue is clear now. We have decided to allow CEPA to
\ncontinue the construction of the power plant and I hope critics
\nwill stop questioning the project,\" Minister of Mines and Energy
\nI.B. Sudjana said in reply to a question by the press on which
\ncompany would construct the power project.<\/p>\n
Sudjana said that CEPA was apparently hit by an internal
\ndispute among its investors. Initially, it was a joint venture
\nbetween CEPA Ltd of Hong Kong and PT Gunung Sewu Mulya of
\nIndonesia, but recently PT Impa Energi joined the joint venture
\ncompany.<\/p>\n
The Ministry of Mines and Energy's Secretary-General Umar Said
\nsaid that according to the latest reports he received, there is
\nno problem with CEPA Indonesia.<\/p>\n
\"The project's location has been settled and so has its
\nenvironmental aspect. Now, it is only the financing that hasn't
\nyet been settled,\" he said.<\/p>\n
State-owned electricity company PT PLN recently asked for
\ngovernment approval to cancel its purchasing power agreement with
\nCEPA.<\/p>\n
After PLN's action, a number of companies -- including a
\nBakrie-led consortium (PT Bakrie Power Corporation, PT Maharani,
\nTomen Co., and Energi Power Group) -- expressed interest in
\ntaking over the power project from CEPA.<\/p>\n
PLN's decision to seek government approval to cancel the
\nagreement was made following CEPA's failure to provide a site for
\nthe coal-fired power plant. Based on a power purchasing agreement
\nbetween the two companies in 1994, CEPA must appropriate a
\nlocation in 365 days at the latest. The agreement also allowed
\nCEPA to construct the Tanjung Jati B power plant under a build-
\noperate-transfer scheme.<\/p>\n
Instead of complying with the agreement, CEPA moved the site
\nfrom the initially agreed upon location -- Bondo village -- to
\nTubanan village, both in Jepara.<\/p>\n
According to reliable sources in Jepara, CEPA was apparently
\nfacing problems in land appropriation in Bondo, forcing the
\njoint-venture company to shift to Tubanan.<\/p>\n
The state firm also considered the construction cost of the
\npower plant -- estimated at US$1.8 billion -- as too high. In
\ncomparison, the Tanjung Jati A steam-powered plant, is being
\nbuilt by the Bakrie consortium with a similar capacity, is
\ncosting $1.66 billion.<\/p>\n
PLN also regarded the price of CEPA's electricity from Tanjung
\nJati B, set at $0.0735 per kilowatt hour (KwH), as too expensive.
\nIn comparison, the Sibolga A power plant in North Sumatra is
\nexpected to sell its electricity to PLN at $0.0655 per KwH, while
\nthe Paiton II project in East Java will sell its electricity at
\n$0.066.<\/p>\n
However, Sudjana said yesterday that PLN can still ask CEPA to
\nlower its electricity price. \"PLN can renegotiate the electricity
\nprice and I hope CEPA is willing to lower it,\" he said.<\/p>\n
Last week, CEPA's president, Djan Faridz, announced his
\ncompany will complete the construction of the power plant on
\nschedule in 1998.<\/p>\n
He also said his company had reduced the electricity price
\nfrom $0.0735 to $0.0645 per KwH at its own initiative. (13)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cepa-to-continue-its-power-project-in-central-java-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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