House wants Tanjung Jati B project restarted<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
In contrast to its usual nationalistic stance, the House of
\nRepresentatives put more pressure on the government on Wednesday
\nto exempt a Japanese contractor from a countertrade regulation
\nthat is hampering the resumption of the Tanjung Jati B coal-fired
\npower plant project.<\/p>\n
\"The construction of the power plant must be started up again
\non time,\" said Emir Moeis, the chairman of the House's mines and
\nenergy commission, while reading out his commission's conclusions
\nafter a hearing with government officials from the electricity
\nsector team set up by Presidential Decree No. 133.<\/p>\n
After the hearing, Emir said that rapid resolution was a
\nnecessary as the role of the Tanjung Jati B plant was essential
\nso as to prevent a future electricity crisis in the country.<\/p>\n
The US$41.6 billion Tanjung Jati B project is located in
\nJepara, Central Java, and will have a power-producing capacity of
\n1,320 Megawatts (MW).<\/p>\n
The construction of the US$1.6 billion thermal power plant was
\nsuspended in 1998 due to the economic crisis, but the government
\ndecided last year to resurrect the project after it learned that
\nIndonesia might suffer from an electricity crisis in the coming
\nyears.<\/p>\n
Responding to the House request, the head of the joint team,
\nCoordinating Minister for Economic Affairs Dorodjatun Kuntoro-
\nJakti, said that the government was seeking advice from legal
\nexperts so as to resolve the matter.<\/p>\n
\"Legal advice is being sought, whether we can provide an
\nexemption to the countertrade scheme. If an exemption can be
\nprovided, the project should resume soon,\" Dorodjatun told
\nreporters after the hearing.<\/p>\n
The resumption of construction, which was originally slated
\nfor March this year, has been hampered by a 1982 government
\nregulation regarding countertrade.<\/p>\n
The regulation provides that every foreign purchase exceeding
\n$500 million that affects the state budget must be based upon a
\ncountertrade arrangement.<\/p>\n
Such countertrade schemes, promoted by the Ministry of Trade
\nand Industry, are aimed at boosting exports, especially non-oil
\nexports.<\/p>\n
They are, however, not popular with foreign investors, in this
\ncase Sumitomo Engineering, the main contractor for the power
\nplant project.<\/p>\n
A government official has said that the investor had expressed
\nobjections, and these could possibly delay the resumption of the
\nproject.<\/p>\n
Learning from the controversy, Minister of Industry and Trade
\nRini MS Soewandi said that countertrade schemes should be
\nflexible.<\/p>\n
Dorodjatun's office, as the final arbiter, is expected to
\nresolve the matter.<\/p>\n
Tanjung Jati B will be financed mostly by Japanese loans.
\nSumitomo Corporation is to provide $550 million, while the
\nremaining funds will come from the Japan Bank for International
\nCooperation (JBIC) and a consortium of Japanese financial
\ninstitutions.<\/p>\n
Under the contract between state electricity company PT PLN
\nand Sumitomo Corp., PLN must pay Rp 405 billion (US$45 million)
\nevery six months, and after 20 years the power plant will become
\nfully owned by PLN.<\/p>\n
The plant is due to start generating electricity in 2006.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/house-wants-tanjung-jati-b-project-restarted-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }